The Impact of Bitcoin’s Fluctuations on MicroStrategy Stock
Bitcoin (BTC), the world’s largest cryptocurrency, has been experiencing fluctuations recently, with its price pulling back to the $63,000 mark. As a result, MicroStrategy (NASDAQ: MSTR) stock has seen a significant drop of over -13% since the markets opened on March 19.
This decline in MicroStrategy stock can be attributed to options traders selling off MSTR stock and effectively shorting it through weekly put orders. The declining price of BTC has led to a bet against the stock’s performance, resulting in over $230 billion vanishing from the total market cap of cryptocurrencies and over $650 million in liquidations.
MicroStrategy Remains Committed to Buying Bitcoin
Despite the increasing volatility of the cryptocurrency market and its impact on MicroStrategy stock, Michael Saylor, CEO of MicroStrategy, continues to promote the company’s cryptocurrency acquisitions.
On March 19, Saylor announced that MicroStrategy purchased an additional 9,245 BTC for approximately $623.0 million. The funds for this purchase were obtained from convertible notes and excess cash. The average price per Bitcoin for this acquisition was $67,382. As of March 18, 2024, MicroStrategy holds a total of 214,246 BTC acquired for approximately $7.53 billion, with an average price of $35,160 per Bitcoin.
The Correlation Between Bitcoin and MicroStrategy Stock
While it may be challenging to establish a direct correlation between BTC and MSTR stock, there are significant similarities in their price charts that can be observed.
- Over the past 7 days, Bitcoin’s price has dropped by over -12%, leading to a corresponding -20% decline in the value of MSTR stock.
- Looking at the year-to-date (YTD) charts, BTC’s rise of 42.77% has correspondingly boosted MSTR stock by over 87%.
It is now impossible to think of MicroStrategy without immediately linking it to Bitcoin. The company’s association with the cryptocurrency has become a defining characteristic.
Hot Take: The Impact of Bitcoin on MicroStrategy Stock
The fluctuation in Bitcoin’s price continues to have a significant impact on MicroStrategy stock. While this correlation may not be direct, there are clear patterns that emerge when analyzing their price charts.
As a crypto reader, it’s important to understand the interplay between cryptocurrencies and traditional stocks. The volatility of the crypto market can affect the performance of companies like MicroStrategy, which have invested heavily in Bitcoin. It remains to be seen how these fluctuations will continue to shape the relationship between cryptocurrencies and the stock market.
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