Microstrategy Stock Takes A Hit As Bitcoin Continues Downward Trend
The price of bitcoin continued falling from its previous all-time high reached late last year, dipping below $65,000 per coin. This downward trend in the leading cryptocurrency also negatively impacted shares of MicroStrategy stock , whose primary business strategy is to purchase and hold bitcoin with funds raised through debt offerings. As the largest corporate holder of bitcoin, MicroStrategy stock closely tracks the price movements of the digital currency.
On Tuesday, MicroStrategy stock fell significantly, dropping as much as 18% at one point as investors reacted to the company’s latest convertible debt offering. Through this offering, stock raised over $400 million to purchase more bitcoin even as its price slid. With over 114,000 bitcoin in reserves worth around $14 billion, stock ‘s value is heavily dependent on bitcoin’s price performance.
CEO Remains Committed To Bitcoin
Despite the current downturn, MicroStrategy CEO Michael Saylor remains steadfast in his bullish view of bitcoin’s potential. In a recent interview, Saylor stated that “the highest best use of capital is to buy bitcoin and hold,” believing it will appreciate faster than other traditional assets classes. He has led MicroStrategy stock ‘s transformation into primarily a bitcoin holdings company over the past few years.
While MicroStrategy stock will likely continue experiencing volatility alongside bitcoin price fluctuations, its CEO is unwavering in his conviction that the cryptocurrency remains undervalued long-term. Only time will tell if this strategy pays off for shareholders of stock in the end.
