Key Points
- MicroStrategy shares have dropped by 13%, coinciding with Bitcoin’s losses of over $10K from its recent peak.
- MicroStrategy’s Bitcoin holdings have reached 214,246 BTC, representing 1% of all Bitcoin ever mined.
MicroStrategy Shares and Bitcoin Volatility
MicroStrategy’s shares have seen a significant decline, with the tech company’s stock value dropping by 13% over the last five trading days. This drop coincides with Bitcoin losing over $10K from its recent high of $73.7K.
A Bloomberg report suggests that MicroStrategy’s strategy of leveraging Bitcoin purchases has contributed to the volatility of its stock. The company’s shares saw a 16% drop on a single day, a figure more than 10 times the drop in Bitcoin’s value.
Bitcoin as a Proxy for MicroStrategy Shares
Bloomberg has highlighted Bitcoin’s volatile nature as a key factor in MicroStrategy’s recent losses. The company has been buying up Bitcoin since 2020, resulting in its stock becoming a proxy for those wanting to invest in the cryptocurrency without buying it outright.
Despite the emergence of US spot ETFs offering an alternative for investors seeking Bitcoin exposure, MicroStrategy has retained its unique appeal. One of the benefits of the company’s stock is that, unlike ETFs, it does not charge a management fee.
To increase its Bitcoin holdings, MicroStrategy has resorted to selling debt, particularly convertible notes. As of March 18, 2024, the company’s CEO, Michael Saylor, confirmed that MicroStrategy’s Bitcoin holdings had reached 214,246 BTC. This represents 1% of all Bitcoin ever mined, with a quarter of the purchase occurring in 2024.
The U.S-based company’s stock is now closely tied to Bitcoin’s price fluctuations. As a result, any impact on MicroStrategy could also affect Bitcoin, and vice versa.
