Key Highlights
- Strategy Inc.’s stock fell 10%, hitting the bottom of its 52-week range, after Bitcoin dropped below $85,000.
- The company recently bought 2,932 Bitcoin for $264 million, raising its total holdings to 712,647 BTC.
- Strategy’s stock tends to mirror Bitcoin’s price movements, often amplifying market swings.
Strategy Inc. (NASDAQ: MSTR), the Bitcoin-focused treasury firm, saw its stock drop sharply on Thursday, falling as much as 11.85% during the afternoon trading session. The stock was currently trading for $140.18, close to the bottom of its 52-week range.
The decline came as Bitcoin (BTC) fell under $85,000, reacting immediately as the company holds a huge amount of Bitcoin; its stock often moves even more strongly than BTC itself.
Bitcoins fell roughly 6% from the previous day. Earlier this week, it had briefly gone above $90,000 but quickly reversed and fell back. The token is trading around $84,300. At one point, the price was near $83,559, down about 7% in a single day.
Trading activity also jumped strongly, with volume rising over 35% to above $55 billion, as traders began to close positions by panic selling. Bitcoin’s total market value also dropped by around 6.73% to $1.68 trillion.
Holding 3.4% of Bitcoin’s total supply
Strategy is known today as a “bitcoin treasury firm,” while still running its enterprise analytics software business. Earlier this week, the company purchased 2,932 BTC for $264 million, bringing its total Bitcoin holdings to 712,647 BTC, which is roughly 3.4% of Bitcoin’s fixed supply.
The firm paid an average price of $90,061 per coin for the recent purchase. Overall, Strategy has spent about $54.2 billion to acquire all its Bitcoin, with an average cost of $76,037 per coin.
The company funded this purchase through its at-the-market stock offering program. Strategy sold about 1.57 million shares of its Class A stock, raising roughly $257 million in net proceeds. It also sold 70,201 shares of its preferred stock, bringing in another $7 million. The company said it still has about $8.17 billion available for future stock issuance under its program.
At the previous price, the company’s holding was worth around $63 billion. However, with the current market dip, that figure has declined to about $58.95 billion, still more than some countries’ reserves.
Other Bitcoin-holding firms saw similar drops
Marathon Digital, another Bitcoin holding company, saw its stock drop by 6.65% due to the price drop in Bitcoin. The stock is currently trading for $9.67 from an intraday high of $10.2. The company holds about 52,850 BTC, which was valued at approximately $6.12 billion.
Share of Japan-based Metaplanet also fell nearly 4%, according to Yahoo Finance. The drop comes weeks after the company shared that it recorded a 104.6 billion yen (roughly $680 million) loss on its Bitcoin holdings last year.
In short, companies like Strategy move with Bitcoin like a high-speed mirror. The company’s large Bitcoin holdings make it both powerful in the crypto market and vulnerable to price swings.
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