Bitcoin, Ethereum, Dogecoin Spike Amid Microstrategy Plans To Bag More BTC: Analyst Says Meme Coins About To Be Flushed By King Crypto

Major cryptocurrencies recorded gains on Monday evening, following news of Business intelligence firm MicroStrategy Inc's  MSTR return to profitability in the second quarter. 

What Happened: In its Q2 earnings results filing on Monday, MicroStrategy announced a significant improvement in its financial performance. 

The company reported a net income of $22.2 million, a turnaround from a net loss of $1.1 billion in the same period last year. 

Despite a relatively stable total revenue of $120.4 million, the primary factor driving this shift was the considerable decrease in digital asset impairment loss. In Q2 2021, MicroStrategy faced a staggering impairment loss of $917.8 million, while in the current quarter, the loss was significantly reduced to $24.1 million. 

"We intend to use the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and working capital, and, subject to market conditions," according to MicroStrategy's Tuesday filing.

This impairment loss occurs when the market price of Bitcoin falls below the acquisition price. During the second quarter, the price of Bitcoin fluctuated between $25,000 and $30,700, and experienced a notable rally in mid-June following the filing of several new spot Bitcoin exchange-traded funds with the Securities and Exchange Commission (SEC).

"Our bitcoin holdings increased to 152,800 bitcoins as of July 31, 2023, with the addition in the second quarter of 12,333 bitcoins being the largest increase in a single quarter since Q2 2021," said MicroStrategy CFO Andrew Kang.

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Currently, the global crypto market capitalization stands at $1.21 trillion, a 1.65% increase in the last day.

In the U.S., the stock market faced a decline at the beginning of August. Investors grappled with various corporate earnings reports and analyzed new economic data, leading to a 0.27% loss in the broad-based index and a 0.43% drop in the Nasdaq Composite.

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Analyst Notes: Crypto analyst Michael Van de Poppe shared an interesting observation regarding the dominance chart of cryptocurrencies, commonly referred to as “The Others.” Drawing upon historical data, Van de Poppe pointed out that in previous cycles, there was a pattern 10 months prior to the halving events. During these periods, the dominance chart reached its lowest point. 

This insight suggests that we could potentially see a similar trend in the current cycle, as we are currently 10 months away from the next halving event, set to take place in 2024. 

Furthermore, Van de Poppe believes that both altcoins and Bitcoin are currently experiencing a bull cycle, which adds to the overall positive outlook for the cryptocurrency market.

Crypto analyst Benjamin Cowen believes that many memecoins still need to be eliminated by Bitcoin (BTC) in the current market cycle.

"I still think that there's a lot of crap out there. A lot of memecoins that need to get flushed out still. Bitcoin normally is able to accomplish that by getting a weekly close below the 20-week SMA and the 21-week EMA in Q3 of the pre-halving year.

On-chain data analytics firm Santiment reports that Bitcoin has successfully reclaimed the $30k mark, thanks to the support of traders who gave in to the recent price declines. Interestingly, the volume is on the rise as August begins, and this breakthrough above the psychological resistance level could potentially shift sentiments in a positive direction.

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