Demand for Bitcoin has decreased as the buying strategy halted, planning a $4.2 billion offering to bolster holdings.
The strategy ended a three-month series of Bitcoin purchases after failing to register any new purchases last week.
However, the company announced a $4.2 billion offering for its STRD shares to resume Bitcoin accumulation.
Immediate demand for Bitcoin has declined in recent weeks despite continued purchases from treasury companies and Bitcoin exchange-traded fund investors.
The strategy announced on Monday that it entered into a $4.2 billion at-the-market (ATM) offering for its preferred Series A (STRD) shares after completing a three-month Bitcoin (BTC) accumulation last week. This comes at a time when immediate demand for Bitcoin has declined despite increased treasury allocations and continued flows into Bitcoin exchange-traded funds (ETFs).
The strategy plans to enhance Bitcoin holdings with a $4.2 billion offering amid declining demand for Bitcoin.
The strategy halted a nearly three-month Bitcoin buying spree that began on April 14, as the company did not announce any new acquisition last week, according to a Monday report submitted to the Securities and Exchange Commission (SEC). During this period, the strategy purchased over 69,000 Bitcoins for nearly $7 billion, increasing its holdings to 597,325 Bitcoins, valued at over $65 billion. This represents more than 2.8% of the total Bitcoin supply of 21 million Bitcoins.
The company also revealed that it entered into a sale agreement to issue up to $4.2 billion in its STRD shares, which it intends to use to resume its Bitcoin purchases.
The new acquisition plan revealed by the strategy comes at a time when Bitcoin exchange-traded funds continued to see inflows last week, achieving a net inflow of $790 million, according to a report from CoinShares on Monday. However, the figure fell short of the average of the previous three weeks' $1.5 billion, which may indicate a slowdown in demand as Bitcoin approaches its all-time high, the report notes.
Despite stable flows of Bitcoin exchange-traded funds and strong buying from treasury companies, immediate demand for Bitcoin has slowed in recent weeks. The decline can be traced to a slowdown in market sentiment, which kept Bitcoin stuck between bullish speculation and short-term uncertainty, according to Sean Young, a senior analyst at the cryptocurrency exchange MEXC.
Young stated in a note: "These market dynamics significantly affect market sentiment," pointing to macroeconomic instability as a primary cause of volatility. He expects the upcoming cryptocurrency week to serve as a catalyst for renewed demand for Bitcoin and could lead to a push toward new levels. "Market participants will seek to gain a preferred position in the market while awaiting the new policy direction towards digital assets," he added.
QCP analysts highlighted that strategic accumulation over the weekend by companies like Metaplanet helped maintain Bitcoin's price despite concerns raised by the sudden activity of eight previously dormant wallets that moved nearly $8.5 billion in Bitcoin on Saturday. However, they expect the third quarter to be bullish based on dynamics from the Bitcoin options market.
QCP analysts wrote: "Volumes remain confined near historic lows, but a decisive break above the resistance level at $110,000 could ignite new demand for volatility. It seems that some major players are taking positions for that." "They continue to add exposure to $130,000 options for September while maintaining a firm spread on $115/$140 options for September, highlighting a structurally bullish outlook for the third quarter."
Bitcoin is trading above $108,000, down nearly 1% in the past 24 hours at the time of publication.
