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Despite the current outlook of MicroStrategy shares, the company is relatively unrelenting in its push to invest in Bitcoin.
The Bitcoin (BTC) and the broader crypto industry have been experiencing a very impressive growth trend in the past week, as a new lease of life was breathed into the ecosystem. While Bitcoin has grown by more than 10% in the past week to hit its highest price level for the year at $48,086.84, this growth is not translating to a corresponding growth amongst the majority of crypto-linked tech stocks around.
The shares of American digital currency trading platform, Coinbase Global Inc (NASDAQ: COIN) have continued on their downward trend, losing as much as 3.83% on Wednesday to $196.70. Coinbase went public back in April 2021, and its shares attained an All-Time High (ATH) of $342.98, a price point that showcases the company’s stock is far from its best.
Coinbase is not alone in this bearish dip as the majority of crypto-linked stocks are also trailing tech stocks in their dump-off, rather than the crypto industry in its price rejuvenation. The shares of Bitcoin mining firm, Stronghold Digital Mining Inc (NASDAQ: SDIG) slumped by exactly 32% on Wednesday and were changing hands at $6.97 after the company reported a miss in its estimates for the future quarters this year.
Greg Beard, co-chairman and chief executive officer of Stronghold unveiled that “over the past few months, we have faced significant headwinds in our operations which have materially impacted recent financial performance and have led us to re-assess our near-term growth plans. We no longer believe targeting 8.0 EH/s by the end of 2022 is achievable, given the current circumstances, and we will focus on installing and optimizing the performance of the miners that we have already ordered while maximizing our financial flexibility.”
The company’s investors were notably caught off-guard by the poor performance forecast, and this explains the massive sell-off that was recorded.
Crypto Stocks Decoupling from General Bitcoin Price Growth
In tandem with these firms, companies like MicroStrategy Incorporated (NASDAQ: MSTR) have also witnessed a sharp decline in their stock value, a trend that is directly opposite of what is expected as these companies are often thought to show a strong correlation with the underlying digital currency ecosystem that they invest heavily in.
Despite the current outlook of MicroStrategy shares, the company is relatively unrelenting in its push to invest in Bitcoin. The Tysons, Virginia-based data intelligence platform recently secured a Bitcoin-collateralized loan from Silvergate Bank, a subsidiary of Silvergate Capital Corp (NYSE: SI). The loan was worth $205 million and it was used in the purchase of Bitcoin, taking the company’s total BTC portfolio to approximately $5.9 billion.
The broader decoupling in the crypto stocks is evident that the nascent industry is capable of charting its own growth path, which may or may not favor the broader ecosystem that is hinged on it.