Well now, it seems that our dear ol’ Strategy, once known as MicroStrategy, has taken a tumble, and not just any tumble, mind you, but a plummet of over 5%! It’s as if the stock market decided to play a game of leapfrog, and MSTR got stuck in the mud. 🐸
According to the fine folks over at Yahoo Finance, Strategy’s stock has nosedived by a staggering 5.65% in pre-market trading. As of the closing bell at 16:00 PM EST, the price stood at a rather sad $282.76. This unfortunate descent was believed to be triggered by none other than Bitcoin (BTC), which decided to take a dive below the $90,000 mark, reaching a low of $87,630 on February 25. Talk about a bad hair day! 💇♂️
Now, this Bitcoin drop didn’t just ruffle a few feathers; it also sent Strategy’s premium ratio into a tailspin. Michael Saylor’s firm, known for its close-knit relationship with Bitcoin, has been the proud owner of more than 2% of BTC’s total supply since late 2024. They even splurged on 20,356 Bitcoin, worth nearly $2 billion at the time. That’s a whole lot of digital gold! 💰
But alas, the winds of fortune have shifted, and crypto analyst Miles Deutscher has suggested that Strategy might need to hit the brakes on its Bitcoin shopping spree after this recent price plunge. 🚦
The premium of $MSTR’s market cap to its underlying $BTC holdings has collapsed from a high of 3.4 in November to only 1.6 now.
The lower this number goes, the harder it will be for Saylor to raise more capital for $BTC purchases.
It seems like he will have to slow his pace.
— Miles Deutscher (@milesdeutscher) February 25, 2025
According to the astute analysis of Mr. Deutscher, MSTR’s premium market cap to Bitcoin holdings ratio has plummeted from a lofty 3.4 in November to a mere 1.6 on February 25. This means that the stock’s market value is now more in line with the actual value of its Bitcoin holdings, rather than being buoyed by high prices. It’s like realizing your prized pig is just a regular hog after all! 🐖
“The lower this number goes, the harder it will be for Saylor to raise more capital for BTC purchases,” said Deutscher in his recent post, sounding like a prophet of doom. 📉
As a result of this Bitcoin price drop, the company will find it trickier than a cat on a hot tin roof to issue shares or use its stock to generate the funds needed to buy more Bitcoin if BTC doesn’t decide to bounce back soon. Furthermore, investors are likely to be as tight-fisted as a miser at a charity event, unwilling to pay more than the current intrinsic value of Bitcoin, thus limiting Saylor’s ability to raise capital. 💸
As previously reported by crypto.news, Bitcoin fell by 6.78% on February 25. Matrixport analysts have warned that BTC could experience a deeper decline, especially with low trading activity limiting demand for dip-buying. It’s a wild world out there, folks! 🌍
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2025-02-25 15:52