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MicroStrategy takes the heat as BTC retraces to $63k

March 20, 2024
in Bitcoin
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MicroStrategy takes the heat as BTC retraces to $63k
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Bitcoin nears $91K as buying pressure soars, but challenges emerge

Spot Bitcoin ETF Options – How U.S exposure is set to soar after CFTC’s notice

  • Microstrategy shares lost 13% of value in the past 5-day trading period.
  • Michael Saylor has confirmed that the company’s BTC holding hit 214,246 BTC. 

MicroStrategy shares further plunged as Bitcoin [BTC] sustained losses hit +$10K from its recent high of $73.7K. 

A recent Bloomberg report established that MicroStrategy’s leveraged BTC buying strategy led to its stock’s volatility. 

“MicroStrategy sank 16% on Monday, more than 10 times the drop in Bitcoin. It slumped 5.7% Tuesday as the digital token extended a retreat from record highs.”

The tech company’s shares extended losses on 20th March. Overall, the shares have lost 13% of value in the past 5-day trading period.

MicroStrategy’s aggressive Bitcoin accumulation

Bloomberg underscored the recent MicroStrategy losses to the inherent volatility risk nature of Bitcoin. In a recent report, Bloomberg stated that; 

“The firm has been loading up on the token since 2020, making its stock a proxy for those who want to bet on the biggest cryptocurrency without buying it outright.”

As a result, Lance Vitanza, managing director of equity research at TD Cowen, told Bloomberg, “That’s the only reason to buy MicroStrategy stock, because you want to own Bitcoin.”

Interestingly, the firm maintained its unique appeal despite the new and trending US spot ETFs that offer an alternative option for investors seeking BTC exposure. 

“Beyond the appeal of the stock given the company’s ability to sell debt to fund Bitcoin purchases, another benefit is that as a share, it doesn’t charge a management fee like ETFs.”

The firm resorted to selling debt, especially convertible notes, to ramp up its BTC accumulation. 

See also  Congressman Emmer raises concerns over Biden administration's "information collection regime" targeting BTC miners

As of March 18, 2024, Michael Saylor, the firm’s chairman and CEO, confirmed that MicroStrategy’s BTC holding hit 214,246 BTC. 

The holding translates to 1% of Bitcoin has ever been mined to date, with about a quarter of the purchase happening in 2024. 

The U.S. based company’s stock is clearly bound to the whims of BTC’s wild price swings from now on. As such, whatever impacts MicroStrategy could spill to BTC and vice versa.  

Previous: Solana to flip Bitcoin? Exec’s prediction suggests you should buy SOL now
Next: BEFE Coin Takes the Meme Market by Storm: Trending this week!
Tags: 63KBTCHeatMicroStrategyretracesTakes

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