I just came across this news on how MicroStrategy is planning on selling part of their Bitcoins to give dividends to shareholders. Although it came out online yesterday, it feels so odd for such news to be coming out at this time. There is only thing that can happen in crypto when such news come out; panic of major crash.
Although Michael Saylor came out to clear up speculations about the BTC sales stating that his company has raised capital to increase more Bitcoin holdings and is selling just a part of their holdings to pay shareholders; but in the context of the current state of the market, it's dangerous as there is this tendency for crypto market users not to wait for clarification before reacting, hence fear of market crash could set in.
It is more sensitive because it is the type of market we are in, at this uncertain time any small bit of information is being multiplied beyond it's normal range; I do not think it has anything to do with how many BTC is being sold, it has to do with how the information is interpreted.
The other thing is that the signal is not clear and straight; you have both parts of signal, on one hand they say that they are increasing their BTC holdings and raising capital for the very purpose; on the other hand they are still selling a small part of their holding.
Though for experienced investors this is perhaps just part of the business and normal operations but average users will not see it like that. People will interpret it as a signal to bear market.
At we all know sentiment dictates, and crypto has never been different from that. Prices don't only react based on facts; they react based on what you feel about those facts and once panic sets in in the market, it will spread like wildfire and influence others to sell based on fear.
Looking at it in another dimension, a company that wants to further increase its holdings cannot be seen to have lost faith in bitcoin so at best it can be said they still have high hopes on bitcoin. But the market in short-term does not always rewarding long-term plans.
Hence, the issue I have with this particular statement from Saylor is not whether their action of selling is causing or will cause market crash, but rather the perception that would build from this, which I think if it goes unchecked could be dangerous to our market.
So I believe this is an intended action from Microstrategy but it is the reaction that people would have from it that can further affect the market.
The lesson to learn from this Saylor's open admittance to selling BTC however, is not about whether they sell BTC or not, the lesson is that it brings us to the realization that “never sell BTC” is s matter of market conditions and continued access to capital.