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Over the weekend, the price of Bitcoin briefly fell to around $ 31,000, more than 50% below its peak last month. It has recovered somewhat and is currently trading at around $ 37,000.
About $ 20 billion in long positions were liquidated last week, Sam Bankman-Fried, managing director of crypto derivatives exchange FTX, told the DealBook newsletter. In terms of price movements: Most of it is liquidations, he said, suggesting the worst is over.
But he also noted news from China on Friday night of a crackdown on Bitcoin mining and trading. This added to other official review news that has scared crypto investors in recent days, from Hong Kong, Canada and the United States.
Companies with Bitcoin on their balance sheets can get nervous. For accounting purposes, cryptocurrency is valued at its purchase price in company accounts. If its value increases, it is not reflected in a company’s accounts, but if it decreases, the value is depreciated and reduces quarterly profits. Tesla, MicroStrategy, and Square are three big companies that invest in Bitcoin. Here is where they stand:
Tesla: The electric vehicle company bought $ 1.5 billion worth of Bitcoin last quarter, at an average price of around $ 34,700 per coin, not far from its current price. Tesla chief executive Elon Musk reported that the company isn’t selling, but it probably isn’t buying either.
MicroStrategy: The business intelligence software company spent around $ 2.2 billion on Bitcoin, at an average price of $ 24,450. The company bought more last week and is still sitting on big gains.
Square: The payments company, led by Twitter chief Jack Dorsey, bought two batches of Bitcoin for its $ 50 million treasure in October at a price of around $ 10,600 a coin and $ 170 million in February at a price of about $ 51,000. He took a $ 20 million write-down on his holdings in the last quarter. He no longer plans to buy, his CFO said this month.
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