Bitcoin and Saylor’s Strategy at Risk: MSTR Market Cap Dips Lower than Its BTC Holdings

8 minutes ago by · 2 mins read

Bitcoin’s slide below $90,000 has resulted in Strategy’s stock dipping under the worth of the company’s BTC stash.

Bitcoin’s fall below $90,000 this week has resulted in concerns for Strategy, the world’s largest corporate holder of the asset. Traders are wondering whether the company’s stock, MSTR, can handle another downturn if BTC BTC $86 804 24h volatility: 0.1% Market cap: $1.73 T Vol. 24h: $74.78 B moves closer to its long-term average purchase price.

At the time of writing, Bitcoin is trading near $86,900, a 21% drop over the past month. Some market watchers argue the drop signals the first stage of a bear market. However, others see it as a normal pause before a potential year-end BTC rally.

Bitcoin Price Slides as Sellers Take Charge

Analyst Jason Pizzino recently noted that Bitcoin has fallen 10% since Nov. 28 after facing rejection at $93,000. He added that volume increased during the pullback, a sign that sellers were far more active than in prior weeks.

Pizzino believes that the market still has a chance to stage a short rebound if buyers manage to regain control.

Notably, Bitcoin’s fall below its 200-day moving average has often led to long waiting periods before a recovery. Historically, this period stretched for two to three months.

The analyst suggests that late January to early February could be an important time for any attempt to return above that long-term trend.

 

Strategy Faces Its Toughest Test Yet

Amid this tough period, pressure on Strategy has intensified. The company’s market cap currently sits around $45.7 billion, over $10 billion below the value of its Bitcoin holdings.

 

As of Dec. 2, Strategy holds around 650,000 BTC worth roughly $55.9 billion. Even after subtracting its $8.2 billion debt load, the company still holds more Bitcoin than the market is currently assigning to its entire operation.

MSTR has seen a 57% drop in its value since early October. The company recently formed a $1.44 billion cash reserve for dividends. Moreover, for the first time in years, the CEO Phong Le acknowledged that Strategy could sell Bitcoin under extreme conditions.

Meanwhile, worries are also building around a possible removal from major global stock indices, which could force up to $8.8 billion in selling, according to JPMorgan.

With an average Bitcoin purchase price of $74,436, Strategy is not much above break-even. One deeper downturn would erase years of accumulated gains for the company.

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