Key Points
- MicroStrategy’s market cap fell by a record 35% amid Bitcoin’s correction.
- Retail investors invested $100M into MicroStrategy shares despite market volatility.
MicroStrategy, once lauded for its skyrocketing stock prices and bold Bitcoin investment strategy, is now experiencing its sharpest four-day market capitalization drop ever recorded.
The company’s valuation plummeted over 35% from its peak on 21st November, erasing more than $30 billion.
On 26th November, MicroStrategy’s stock [MSTR] suffered a further 12% decline, closing at $353, as selling pressure increased.
This significant downturn has reignited discussions about the risks of its heavily leveraged Bitcoin-focused approach.
MicroStrategy’s Stock Plunge and Retail Interest
Kobeissi Letter commented on the situation, stating that MicroStrategy’s stock, MSTR, fell a massive -35% from its peak seen on November 21st, erasing ~$30 billion of market cap in 4 trading days.
Despite a brief recovery, MSTR’s stock continues to be impacted by Bitcoin’s ongoing correction.
As of 27th November, the stock price dropped 7.5% over 24 hours, trading at $354.10, according to TradingView data.
Interestingly, retail investors have shown unprecedented interest in MSTR shares, collectively investing $100 million into MicroStrategy over the past week.
Correlation Between Bitcoin and MicroStrategy
In the past month, Bitcoin surged 44%, while MicroStrategy posted a 32% rally.
On a yearly scale, BTC’s growth reached 146%, while MSTR outpaced it with a staggering 599% increase.
The price movements of MicroStrategy and other crypto-related stocks are heavily tied to Bitcoin’s performance, as these entities either hold the asset or generate revenue through trading activity.
Following Trump’s U.S. election victory, BTC’s rally gained momentum, though it fell just shy of the $100,000 mark.
The recent price downturn has reignited criticism from skeptics, including Peter Schiff, who highlighted perceived vulnerabilities in Bitcoin and MicroStrategy’s reliance on it.