Here’s Why MicroStrategy Stock Is Down 20% Amid Bitcoin Bets

MicroStrategy Stock and the Bitcoin Levered Play

Global industry commentary platform The Kobeissi Letter provided insights into what is happening with MicroStrategy and Bitcoin. Kobeissi noted that the decoupling in MicroStrategy stock and Bitcoin started about a month ago. Within that time, Bitcoin price has inked a mild 2% growth with MSTR down by more than 20%.

While MicroStrategy is considered a levered Bitcoin play, the stock price’s divergence is to much. The Kobeissi Letter pointed out the firm’s business model which is to take on debt to buy more BTC. At the moment, the business intelligence firm has maxed out its debt funding sources including its shares.

MicroStrategy Stock Price and the US Dollar Correlation

Despite its sustained Bitcoin acquisition strategy, MicroStrategy has seen a significant decline in its stock price. The MSTR stock is down by 2.46% in After Hours trading after closing Monday’s session at 8.19% to $302.96. This stock price turnaround has driven many debates on the cause despite the alleged correlation it maintains with the US Dollar.

The Kobeissi Letter hinted that Michael Saylor alone has a 46.8% voting power. With just 4% needed, chances are this stock count will gain the board’s approval. However, the current share slump hinges on how investors perceive the 10 billion share count proposal. If approved, it would dilute MSTR stock too much and if not, MicroStrategy will get stuck with its Bitcoin funding strategy.

What Lies Ahead for MicroStrategy Stock?

Barring the funding challenges of the past week, MicroStrategy stock remains one of the best-performing stocks in the market this year. According to market data, MSTR is up 342% Year-to-Date (YTD) as compared to the S&P 500 Index that is up 24.54%. In the new year, MicroStrategy is poised to stabilize its best funding strategy to keep up with its treasury reserve agenda.

Meanwhile, MSTR’s inclusion in the Nasdaq-100 might reboot the stock’s attractiveness overall. With Bitcoin also likely to rebound ahead of the pro-crypto Donald Trump inauguration, the stock’s big rebound is also possible. However, it is crucial for investors to weigh the pros and cons of MicroStrategy’s funding strategy and the potential impact it may have on its stock price.

Conclusion

In conclusion, MicroStrategy’s stock price has been a subject of concern due to its decoupling with Bitcoin. The firm’s levered Bitcoin play and funding strategy have contributed to this decline. However, with the approval of its 10 billion share count proposal and the potential inclusion in the Nasdaq-100, MicroStrategy stock may be poised for a rebound in the new year.

FAQs

Q: What is the current state of MicroStrategy stock?

A: MicroStrategy stock is currently down by 2.46% in After Hours trading after closing Monday’s session at 8.19% to $302.96.

Q: Why is MicroStrategy’s stock price declining?

A: MicroStrategy’s stock price is declining due to the decoupling with Bitcoin, which has led to concerns over its funding strategy and potential impact on its stock price.

Q: What is the significance of MicroStrategy’s inclusion in the Nasdaq-100?

A: MicroStrategy’s inclusion in the Nasdaq-100 may reboot its attractiveness overall and potentially lead to a rebound in its stock price.

Q: What is the impact of Donald Trump’s inauguration on MicroStrategy stock?

A: The potential inclusion of Bitcoin in Donald Trump’s pro-crypto agenda may lead to a rebound in Bitcoin’s price, which could positively impact MicroStrategy stock.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.