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As noted by James Check, the lead analyst for Glassnode, business intelligence firm MicroStrategy has a cost basis that is identical to that of your average Bitcoin buyer.
Glassnodes’s True Market Mean (TMM) metric estimates the cost basis of all coins acquired on secondary markets.
The firm claims that TMM is “one of the most accurate models available” for determining the aggregate on-chain acquisition price of the leading cryptocurrency.
As reported by U.Today, MicroStrategy started the last month of the year with another stunning Bitcoin purchase, adding $1.5 billion worth of Bitcoin.
The company’s average purchasing price currently stands at $58,263, which is close to the average purchasing price of your average investor, according to Glassnode data.
According to the mean reversion theory, assets tend to gradually drop back to their long-term mean.
The aforementioned Glassnode metric could be used as a reference point in models that are based on the mean reversion theory.
According to CoinGecko, the leading cryptocurrency is currently changing hands at $96,248, meaning that the price is 65% bigger compared to MicroStrategy’s current purchasing price.
In 2022, the price of Bitcoin fell well below MicroStrategy’s average buying price. The company was briefly underwater, and there was some speculation about MicroStrategy potentially facing margin calls.
Recent research suggests that MicroStrategy could endure an 80% Bitcoin price crash. For the value of the company’s assets to drop below its liabilities, the price of Bitcoin would have to crash below $19,000, which seems very unlikely.
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