As Bitcoin declines, so does Microstrategy's share price

MicroStrategy, the largest institutional holder of BTC, is again in the red thanks to its massive bitcoin position. Stocks companies fell freely yesterday and the double-digit price drop led to a multi-year low.

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Shares of MicroStrategy fell 22.5 %

What began in the summer of 2020 - after the outbreak of the COVID-19 pandemic - has become a crypto-world phenomenon. The American software company began frequent purchases and accumulated massive amounts of BTC, some smaller, some billions of dollars, and became the company's largest holder of the primary cryptocurrency.

Following the last announced purchase earlier this year, MicroStrategy's BTC holdings are now 129,218 BTC. The company amassed them for an average price of approximately $ 30,700.

However, this means that the organization led by Michael Saylor is now in an unrealized loss, as the primary cryptocurrency has fallen sharply in the last few days, recording the lowest price since December 2020 of $ 21,245 at the time of writing.

Simple math shows that MicroStrategy has spent less than $ 4 billion to acquire all of its bitcoin holdings. Given the current price of BTC, this means that the company's position is now worth less than $ 3 billion, which represents a total unrealized loss of a whopping $ 1 billion.

During the mid-May correction, MicroStrategy announced that if BTC fell to $ 21,062, its $ 205 million loan from Silvergate would be liquidated. However, the company is prepared to use more of its BTC as collateral to prevent this.

Despite the ongoing crisis, Saylor remains bullish and predicts a price of $ 1 million in the near future.

While the crypt market is in ruins, stock markets, indices and large corporations have also seen corrections. However, one of the worst affected is MicroStrategy. As a company with a massive exposure to BTC - an asset that has fallen by more than 20 % since the markets were last opened, MicroStrategy shares have experienced adverse effects.

MSTRs fell 22.5 % per day, currently trading at $ 151. The shares reached an all-time high at the beginning of last year and the price briefly exceeded USD 1,000. However, this means that MicroStrategy shares have now fallen by 85 % in less than a year and a half.

In addition to MicroStrategy, shares of other cryptocurrency companies such as Riot Blockchain and Coinbase Global also fell. Both experienced more than 13% decline per day.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.