The Capital
Published in

The Capital

Citibank Attacks Bitcoin by Proxy?

Check out our new platform 👉 https://thecapital.io/

After revealing a possible $318,000 target for bitcoin by December 2021, Citibank has apparently changed its tune on bitcoin by proxy, downgrading MicroStrategy’s status from ‘neutral’ to ‘sell’ after another bitcoin strategy announcement from the business intelligence company.

Is it me, or is there an apparent conflict of interest brewing in Citibank?

Citibank reveals bitcoin conflict of interest in latest MicroStrategy downgrade

Last Wednesday, we discussed what could be in the works for the next period of bitcoin fear uncertainty and doubt as the cryptocurrency consolidates just below all-time highs.

It appears that this process has begun, as experts from Citi bank turned up the heat on bitcoin by proxy, downgrading MicroStrategy’s corporate standing this week.

On Tuesday, MicroStrategy was downgraded to a “sell” from “neutral,” and company shares subsequently fell.

Citibank reportedly downgraded the company due to its “disproportionate” focus on bitcoin after the company announced it was raiding more money to buy bitcoin.

Citi analyst Tyler Radke said that the CEO Michael Saylor put investors at considerable risk, especially after what he called an “overextended” rally since September.

He wrote: “MSTR’s bitcoin investment has returned $250M (or worth $26/share or +20% towards stock) since August ’20. While impressive, it pales in comparison to the 172% return in the stock. At the current stock price, our analysis suggests that the market is pricing in much more optimistic valuation scenarios for the core business and Bitcoin.”

On Monday, MicroStrategy revealed plans to allocate an additional $400 million to its bitcoin treasuries. To make this bold move, the company plans to issue $400 million in convertible senior notes, increasing the company’s bitcoin reserves by over 20,800 bitcoin.

The company is the largest corporate holder of bitcoin by miles, owning 40,824 bitcoin on its books, worth a combined $769.2 million.

This comes as institutions and investors, many of whom are all revered as investment legends (Paul Tudor Jones and Stan Druckenmiller), have all come out in favour of owning bitcoin due to its inflationary hedge properties.

Curiously, a report by Citibank back in November discussed the likelihood of a $318,000 bitcoin by December of next year. Indeed, just last month, one Citibank senior executive told institutional clients that such a figure would in fact be the weakest rally for the digital asset, as reported by bitcoin.com.

Either Citibank is feeling an intense fear of missing out, or there’s a major internal conflict of interest brewing within the bank’s ranks.

Ultimately, it matters not which institution loads up on bitcoin first. Bitcoin’s game-theory ensures that the winner is bitcoin and the people who hold it

Technically speaking

$20,000 plus by end of December 2020

Immediate levels to watch

  • $17,400 bounce zone
  • Close below $16,200 indicates a shift in directional bias; nullifies the above projection
  • Break above $19,500 suggests an impulse move above $20,000.

During such times, it’s best to avoid the noise on Crypto Twitter.

Per the words of Eric Hoffer, ‘every cause starts out as a movement, becomes a business and eventually degenerates into a racket.’

Crypto Twitter has been front-running the latent stages of this cycle since 2017, and it still hasn’t materialised.

Onward bitcoin Spartans!

Catch you next time.

Share this content on your socials. Appreciate your support!
Join the
Telegram channel for live updates!
Follow me on
Twitter & Instagram for more lighthearted content.
Referrals, business opportunities and feedback are also appreciated.

Read More: Ray Dalio admits bitcoin is an ‘interesting’ alternative to gold

https://chrisoncrypto.com/blog/f/ray-dalio-admits-bitcoin-is-an-interesting-alternative-to-gold
https://chrisoncrypto.com

Are you a frequent reader? Tip me!
Send BTC to this address:
3EydsEYpjHn68axKnCUqBB7EbqcxrEjamr

Best regards,
Christopher Attard
Founder of Chris on Crypto
Contributor to www.cityam.com
Connect directly on: Telegram

Originally published at https://mailchi.mp.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Chris on Crypto

Chris on Crypto

Journalist-turned crypto-writer & analyst; forging the narrative, stacking sats.