Bitcoin’s Future Uncertain as MicroStrategy Faces Downgrade and Funding Constraints

In a significant development for the cryptocurrency market, Wall Street analysts have downgraded MicroStrategy (renamed Strategy) to a ’sell’ rating, citing the company’s exhausted debt strategy to fund Bitcoin purchases. This move has raised concerns about Bitcoin’s future and the broader implications for the crypto market.

Wall Street Downgrades MicroStrategy to Sell, Citing Tapped Out Debt Strategy

Wall Street has downgraded MicroStrategy (now known as Strategy) to sell, stating that its debt strategy to fund Bitcoin purchases is ‘tapped out’. The firm’s current price is about 23% below Monday’s closing price, and analysts believe Strategy has exhausted its options to continue funding its Bitcoin obsession. Analyst Gus Galá from Monness Crespi Hardt noted in a Tuesday report that while they were initially negative on several aspects, they have gained confidence that the convertible issuance strategy is likely tapped. Strategy has been issuing convertible debt since 2020 to buy more Bitcoin, but now plans to rely more on fixed income issuance due to weak demand for its convertible debt.

Cryptocurrencies Price Prediction: Bitcoin Price Forecast

Bitcoin (BTC) price faces a slight rejection around the $85,000 resistance level on Wednesday after recovering 3.16% the previous day. A K33 report highlights that Cryptocurrencies and Equities have largely de-risked going into Donald Trump’s “Liberation Day” on Wednesday. Meanwhile, the US spot Bitcoin spot Exchange Traded Funds’ (ETFs) demand continues to weaken as it recorded an outflow of $157.80 million on Tuesday.

Arthur Hayes Predicts Bitcoin to Hit $250k in Q4

Arthur Hayes, in a new essay titled The BBC, predicts that Bitcoin will reach $250k in Q4. He believes that Bessent will force Fed’s Powell to start printing, leading to fiscal pressure and resumption of quantitative easing. Hayes has been closely watching Trump’s second presidency and the views of other macro analysts, some of whom believe Trump will cause chaos while others think he is serious about resetting the financial and military structure of the US.

Bitcoin: Funding Rate Falls into Negative Territory, Market Volatility Continues

Bitcoin’s average Funding Rate across four major exchanges, including Binance, Bybit, OKX, and Deribit, has declined into negative territory. Over the past day, BTC has experienced extreme volatility, with prices fluctuating between $81k and $85k, currently sitting at $84k. Despite this volatility, key stakeholders remain optimistic and anticipate market stability. CryptoQuant analyst Axel Adler has cited the Funding Rate as an indicator of upcoming market stability.

Japan’s Metaplanet Doubles Down On Bitcoin With 160 BTC Buy

Metaplanet has purchased an additional 160 Bitcoin worth $13.39 million, pushing its total holdings to 4,206 BTC. The Japanese company paid about 12.49 million yen ($80,063) per Bitcoin in this latest acquisition. The purchase strengthens Metaplanet’s position as Asia’s largest corporate Bitcoin holder and the ninth-biggest worldwide. The firm first announced its Bitcoin strategy in April 2024 and aims to reach 10,000 BTC by the end of 2025 and expand to 21,000 BTC by late 2026. Metaplanet’s stock dropped slightly during Wednesday morning trading in Japan.