50% Crash: Even Bitcoin couldn’t save MicroStrategy stock from the crash
The bitcoin price has seen one of its biggest corrections since the bull market began and has been struggling to regain $50,000 ever since. But the scenario is nowhere near as dire for the cryptocurrency as it is for one of its biggest supporters.
Although the company’s share price initially benefited from the BTC purchase, it wasn’t enough to stave off profit-taking and an Crypto Profit eventual, now 58% correction in MicroStrategy. Why did this happen – and what might it say about the current crypto market trend?
MicroStrategy shares fall 50% after buying BTC
One of the biggest catalysts that triggered Bitcoin’s recent bull market was undoubtedly when MicroStrategy announced that it had bought Bitcoin to boost its corporate treasury. From then on, others followed suit and CEO Michael Saylor doubled and tripled his initial purchase.
The price per BTC has risen accordingly, from just over $10,000 to almost $50,000 currently. Along with Bitcoin’s price, MicroStrategy’s shares have risen almost as much, as investors used the company to gain exposure to the cryptocurrency and also bet big on the re-emerging token.
But as bitcoin began to correct amid a choppy macro environment, shares of MicroStrategy have plunged 58%. The chart appears to show a parabola that has now broken, suggesting the correction is nowhere near over.
Could Bitcoin fall victim to the Saylor effect?
Why MicroStrategy is taking such a beating? It could be due to the nervousness of the stock market, which has left the crypto market largely untouched. But it could also be a sign of what is to come instead.
The orange line superimposed behind the MicroStrategy chart above is Coinbase’s BTCUSD price chart. Not every peak and trough is perfectly followed, but the path is close enough to suggest that there may be some correlation between the two.
If there is a correlation, Bitcoin (Kraken CEO bullish on Bitcoin: „It will go to infinity“) is either about to correct another 20-25% or something else is going on. As for the other reasons for the divergence, it could boil down to the fact that there are now more opportunities to expose BTC to traditional markets than there were a year ago.
Another possibility is that CEO Michael Saylor’s BTC-buying spree is slowly being seen as irrational and former believers are now jumping ship. Saylor, who now has „laser eyes“ on Twitter, is one of cryptocurrency’s biggest proponents, but doesn’t always back the right things at the right time – even if the technology itself he backs is a sure thing.
Saylor was once considered the biggest loser of the dot-com bubble, but ultimately the internet prevailed. Few argue that Bitcoin will eventually do the same – but could this scenario that Saylor has encountered in the past play out again?