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MicroStrategy stock price plunges as MSTR’s bitcoin holding loses another $400m as BTC price crashes

By Jenal Mehta

14:51, 9 November 2022

bitcoin on balance
FTX crisis sends the crypto market in turmoil, MicroStrategy loses 20% of its value in a day. Photo – Getty Images

Cryptocurrency crash appears to be paving a path towards doom for the whole industry.

Bitcoin (BTC) miner and business intelligence company MicroStrategy (MSTR) is no exception, its share price plummeted some 20% in one day.

Other companies in the arena also saw a similar outcome, crypto exchange Coinbase (COIN) and fellow bitcoin miner Riot Blockchain (RIOT) also saw their share values lower by more than 10%.

Bitcoin vs United States Dollar Price Chart (BTC/USD) 

MicroStrategy (MSTR) was a pioneer in being one of the first American institutions changing its portfolio to cryptocurrency. It is now the largest publicly traded company to own Bitcoin, it owns 130,000 BTC, which is around 0.62% of all circulated BTC.

It accumulated its Bitcoin (BTC) collection over a number of dips in the market as reported by Finbold with its former CEO Michael Sayler holding the belief that the digital asset is a valuable store of value and its ability to hedge against inflation is “second to none

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MicroStrategy (MSTR) Price Chart

The cryptocurrency market has been volatile in recent sessions. With large crypto exchange FTX potentially facing solvency.

Despite this, the current CEO of MicroStrategy, Phong Le, appears to have the same confidence in BTC as his predecessor.

In a recent earnings call Le stated:

“We have not sold any Bitcoin to date. To reiterate our strategy, we seek to acquire and hold Bitcoin for the long term. And we do not currently plan to engage in sales of Bitcoin. We have a long-term time horizon and the core business is not impacted by the near-term Bitcoin price fluctuations.”

BTC/USD

67,691.40 Price
-0.240% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

XRP/USD

0.61 Price
+2.080% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

ETH/USD

3,448.55 Price
-1.600% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

SOL/USD

179.60 Price
-2.200% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

Coinbase (COIN) Price Chart

Is he right in holding out hope for the currency?

One of the biggest changes to occur in the industry of digital assets is regarding its regulatory oversight. Globally governments have begun to implement better practice requirements when it comes to crypto currencies.

President Joe Biden put out an executive order in September 2022  Ensuring Responsible Development of Digital Assets, this requires agencies to develop framework and policy developments to support implications for consumers and investors.

Since its inception in 2009, BTC and other cryptocurrencies have garnered impressive returns. In a study by KPMG, they found that 58% of their respondents, which includes family offices and high net worth individuals, currently invest in digital currencies. Their aim being to capture upside potential above what traditional financial instruments have been able to provide.

The report states however “market volatility in 2022 may have an impact on clients’ investment outlook and priorities going forward. As such, clients and private wealth management institutions will need to carefully assess the current market conditions with regards to digital asset portfolio management”

As for bitcoin specifically, Mike McGlone – BI Senior Commodity Strategist at Bloomberg believes it remains a risky asset.

“The benchmark crypto, well on its way to becoming a digital store-of-value, remains in a price discovery mode and is a risk asset, and has been rising with the equity tide. Bitcoin will face initial headwinds if the stock market drops, but to the extent that declining equity prices pressure bond yields and incentivize more central-bank liquidity, the crypto may come out a primary beneficiary.”

Markets in this article

BTC/USD
Bitcoin / USD
67691.40 USD
-159.25 -0.240%
COIN
Coinbase Global Inc (Extended Hours)
264.94 USD
8.07 +3.150%
MSTR
MicroStrategy Incorporated
1801.87 USD
21.59 +1.220%
RIOT
Riot Blockchain, Inc.
12.28 USD
0.21 +1.750%

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