Public Keys: Strategy Bypasses Bitcoin Dip as Circle Establishes Presence

Public Keys is a weekly recap from Decrypt that monitors the major publicly traded cryptocurrency firms. This week’s edition of Public Keys examines the perspective of analysts on whether the approach taken by Michael Saylor’s Strategy, formerly MicroStrategy, could have effectively timed its recent Bitcoin purchases, a possible positive outcome of the trade war for aspiring U.S. Bitcoin hardware producers, and speculation surrounding the IPO of USDC issuer Circle.

Timing Challenges for Strategy

It is well-known that Strategy, formerly MicroStrategy, has invested billions in acquiring Bitcoin. Currently, the software firm holds nearly $44 billion worth of BTC—equivalent to 56% of its $78 billion market capitalization. This year alone, it has allocated $5.3 billion for Bitcoin purchases.

However, investors are growing doubtful about the company’s ability to strategically time its purchases as the post-election excitement fades. On Monday, its stock premium fell to a 10-month low after the company disclosed in an SEC filing that it did not acquire any Bitcoin during the latest price dip.

By Friday afternoon, Strategy, traded under the MSTR ticker on Nasdaq, closed at $287.18, reflecting a 5.6% decrease for the day.

A Shift in the Chip Game

Former President Donald Trump’s trade wars have sent financial markets on a tumultuous ride. However, if tensions persist, it might gradually undermine the supremacy of Bitmain, the Chinese Bitcoin mining rig powerhouse.

This situation could favor Jack Dorsey’s Block, Inc., focused on Bitcoin, along with Core Scientific, the firm that Dorsey’s company has an initial agreement with to sell its chips.

In its Q4 earnings call last month, Core Scientific announced it would postpone upgrades to its mining rig fleet until it could operate Block’s 3-nanometer mining chips, expected to launch in the latter half of 2025.

Nevertheless, Bitcoin mining analysts pointed out that Block is not the only player making moves against Bitmain.

Block, traded under the XYZ ticker on the New York Stock Exchange, finished the week at $59.81, having appreciated by 0.33% during trading.

Circle’s Strategic Moves

While the specifics are limited, representatives from Circle, the issuer of the USDC stablecoin, recently visited Washington to engage with the Securities and Exchange Commission’s Crypto Task Force. This delegation included Circle President Heath Tarbert, General Counsel Dan Kaleba, Deputy General Counsel Christine Parker, and Vice President Corey Then.

A public memo indicated that the company characterized USDC as a “payment stablecoin” and argued for the “non-applicability of securities laws to certain payment stablecoins.”

A few months ago, ARK Invest speculated that Circle was preparing to relaunch its IPO efforts under the Trump administration.

Circle previously aimed for a public listing through a SPAC but had to retract that plan in 2022. Rumors suggest a renewed attempt might occur in 2024.

Towards the end of last year, the company relocated its global headquarters from Boston to New York City to be situated in the “heart of Wall Street.” They’re also interested in establishing offices at One World Trade Center, directly across from financial giant Goldman Sachs.

Notably, crypto exchange Coinbase was the first—and so far the only—major cryptocurrency company to go public via a direct listing in 2021, thus it’s not surprising that Circle has diligently attempted to follow in its footsteps.

Additional Insights

Meanwhile, the newly public Bitcoin rewards company, Fold, has added $41 million to its Bitcoin reserves. It’s not alone in this dip-buying trend, as Japan’s Metaplanet saw its stock rise by 20% after increasing its Bitcoin treasury by $43 million, bringing its total value to approximately $252 million.

Wall Street’s Rosenblatt has initiated coverage on cryptocurrency exchange Coinbase, issuing a buy rating with a target price of $305. The firm stated that the recent market downturn suggests that investors should focus on “higher ground,” meaning they should limit crypto investments to well-established companies like Coinbase.

Additionally, San Francisco-based Kraken may also be eyeing a Wall Street IPO soon, according to a recent Bloomberg report. A spokesperson from Kraken informed Decrypt that discussions regarding going public have been underway for an extended period, making the news somewhat expected.

Lastly, Nasdaq President Tal Cohen posed a question familiar to traders: Why sleep? He mentioned in a LinkedIn post that the exchange is in discussions with regulators to permit 24-hour trading—but only 24/5, as they are not ready to relinquish their weekends.

Edited by Guillermo Jimenez.