The market is not afraid of the US rating downgrade, Bitcoin returns to 105K, MicroStrategy buys BTC again

Here is the English translation: After Moody's downgraded the US sovereign credit rating from AAA to Aa1, US Treasury yields surged on Monday (5/19), with US stocks initially plummeting. However, as the market gradually digested the rating impact, Treasury yields fell from their peak, and the three major indices ultimately stabilized, with the S&P 500 slightly rising. Bitcoin fluctuated and returned to $105K this morning, with MicroStrategy announcing another Bitcoin purchase. Despite facing a class-action lawsuit, MSTR's stock still rose 3.41% yesterday. The three major US rating agencies, Moody's, announced on the 16th after the New York market closed that they were downgrading the US debt credit rating from the top-tier Aaa to Aa1, primarily due to the continuously expanding fiscal deficit and the Republican-controlled House's failure to pass a massive tax reduction and spending cut plan. However, the other two rating agencies, Standard & Poor's (S&P), had already downgraded in 2011, and Fitch did so in 2023. The market quickly digested the risks of this downgrade. Most analysts believe that Moody's downgrade is essentially not a significant event, and the market has shown "buy on dips" sentiment. Bitcoin briefly attacked $107K in yesterday's Asian morning session before falling to $102K, closing at $105,647 before this article. The volatility resulted in another liquidation for open positions. According to Coinglass data, $102 million in Bitcoin positions and $112 million in Ethereum positions were liquidated in the past 24 hours. MicroStrategy's founder Michael Saylor, a long-term Bitcoin believer, not only urged people to buy Bitcoin on X but also walked the talk by purchasing 7,390 more Bitcoins last week. Despite facing a class-action lawsuit alleging investor misleading, MSTR's stock rose 3.41% yesterday and has increased by 37% year-to-date, outperforming Bitcoin.

Purchasing 7,390 Bitcoins in One Week, Total Holdings Exceed 570,000 Coins

After funds were in place, MicroStrategy quickly invested the proceeds into the Bitcoin market. According to the report, the company acquired 7,390 Bitcoins in just one week, with a total expenditure of $765 million, at an average purchase cost of approximately $103,498 per coin.

As of May 18, 2025, MicroStrategy's total Bitcoin holdings have reached 576,230 coins, with a total purchase cost of $40.18 billion, averaging $69,726 per coin. This further solidifies the company's position as one of the largest public companies in terms of Bitcoin holdings globally.

Facing Investor Lawsuit, Accused of Concealing Risks and Losses

While making significant Bitcoin purchases, MicroStrategy is also facing a legal challenge. On May 16, 2025, an investor named Anas Hamza filed a class-action lawsuit in the U.S. District Court for the Eastern District of Virginia, targeting MicroStrategy itself, as well as Chairman Michael Saylor, CEO Phong Le, and CFO Andrew Kang.

The lawsuit alleges that these executives potentially violated Sections 10(b) and 20(a) of the U.S. Securities Exchange Act and related SEC regulations between April 30, 2024, and April 4, 2025, by releasing misleading information or deliberately concealing significant risks related to their Bitcoin strategy, resulting in investor losses.

Of particular concern is that the lawsuit specifically mentions the new accounting standard (ASU 2023-08) regarding the impairment of crypto assets, which could make financial report losses more apparent, and the company did not adequately disclose this risk.

Company Statement: Will Actively Respond to Lawsuit

Regarding the lawsuit, MicroStrategy stated it will "vigorously defend" itself and currently cannot estimate potential outcomes or the scope of potential losses. The company has not provided further comments on the lawsuit but emphasized it will respond in accordance with the law.