By
Steve Muchoki
April 19th, 2024
The company has been recording more losses as Bitcoin’s price has plummeted more than 50% from its record high.
Business intelligence company MicroStrategy Inc (NASDAQ: MSTR) is also suffering from the global market crash which includes the Bitcoin fall. Tech stocks and others have been at their lows for quite some time. The interest rate hike announced by the Federal Reserve also triggered further declines, dragging companies along. The crypto market also felt the pressure when TerraUSD significantly lost its value. Amid the current unsavory market conditions, MicroStrategy dropped to its 18-month lows as crypto prices continue to plunge.
At press time, MarketWatch data shows that MicroStrategy stock is trading at $193 in extended trading. This represents more than a 14% loss in the last five days. The business intelligence company has been gathering declines in the last twelve months, shedding 58.91% over the past year. In addition, MSTR has lost 48.90% in the last three months and another 50.64% over the past month.
Notably, MicroStrategy has not traded this low since November 9th, 2020. At the time, the company’s shares traded at $183. This happened when Bitcoin was at $16,410.
MicroStrategy started amassing Bitcoin as part of its investment strategy in August 2020 and holds 129,218 Bitcoins. In April, CEO Michael Saylor said in a Shareholder letter that MicroStrategy is the “largest publicly-traded corporate holder of bitcoin.”
MicroStrategy Slumps amid Bitcoin Crash
However, the company has been recording more losses as Bitcoin’s price has plummeted more than 50% from its record high. Currently, the largest cryptocurrency by market cap is around $29,000. BTC has also missed nearly 10% in its 24-hours trading volume. He commenced its BTC holdings, summing them up to an aggregate purchase price of $3.97 billion. Saylor also placed the average purchase price of each coin at approximately $30,700.
Despite the alarming stock and crypto market crash, CEO Michael Saylor remains confident. He believes the company’s Bitcoin holding is a safe haven for Bitcoin-backed loans. The Bitcoin bull explained in a tweet that the company is capable of settling its debt. He added that MicroStrategy would only need to seek alternatives means to pay the loan if Bitcoin trades below $3,562. He wrote:
“MicroStrategy has a $205M term loan and needs to maintain $410M as collateral. $MSTR has $115,109 BTC that it can pledge. If the price of #BTC falls below that it can pledge. If the price of BTC falls below $3,562 the company could post some other collateral.”
The CEO has proven to be a devoted Bitcoin fan. Recently, he said Bitcoin will still go into millions despite the ongoing downturn. He reminded the world that MicroStrategy is with Bitcoin for the long term. He also negated any indication that the company may liquidate its Bitcoins in the near future.