Shares in Strategy (MSTR) stock continue to tumble in price alongside the recent Bitcoin crash, which has now seen BTC fall to under $84,600. Bitcoin, which soared to a record $126,210.50 in Early October, has now fallen over 33% in just eight weeks. Both MSTR and BTC are now trading in the red over the last 365 days, after record gains mid-year.
Other stocks across the crypto industry have also continued to fall this past week. Crypto exchange Coinbase Global’s stock has fallen 4% and online trading platform Robinhood Markets lost another 5.2%. Additionally, Bitcoin mining company Riot Platforms’ stock dropped 7% this past week. However, Michael Saylor’s Strategy (formerly Microstrategy) has spent much of the past two years leading the charge of institutional investment in BTC. Previously reaping the benefits of the BTC surge, that huge investment now looks like a nightmare.
Analysts point to a number of factors that have led to the sell-off in bitcoin and other crypto investments, including a broad risk-off sentiment that has gripped markets this fall, sending investors toward safer havens such as bonds and gold. Furthermore, one analyst, Nic Puckrin, investment analyst and co-founder of the Coin Bureau, suggests the recent crash resembles one from August 2024, where BTC fell from over $66,000 to around $54,000 in less than one week. “Now that history is repeating itself, it’s wise to prepare for more volatility,” Puckrin said, highlighting how the sharp drop last year was followed by a recovery and new highs.”
Also Read: Another Major Crash For Bitcoin: What’s Happening This Time?
On the other hand, the analyst still points to some potential catalysts that could rescue both BTC and crypto stocks like Strategy (MSTR). “Beyond Japan, the macro backdrop remains favorable for risk assets,” he said, noting the growing probability that the US Federal Reserve will cut interest rates in December. “If you zoom out, there are still reasons to be optimistic amid all the doom and gloom.” Should the Fed indeed execute another interest rate cut, it could fuel a brief stock and crypto rebound, helping both BTC and MSTR.
In other news for Strategy stock, the company recently sold $136.1 million of preferred stock under its at-the-market offering program. The company then used those proceeds, along with cash from a new preferred stock deal, to buy 8,178 bitcoin last week, according to a Form 8-K filed Monday with the U.S. Securities and Exchange Commission. Per the form, the company sold three series of preferred stock under the ATM. It did not sell any shares of its Class A MSTR common stock.