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Actions of MicroStrategy Inc. (NASDAQ:MSTR) fell more than 8.5% on Monday, marking a rough start to its nascent stay on the Nasdaq 100.
The software company and corporate principal. bitcoin The incumbent (CRYPTO: BTC) has been struggling lately, posting its fifth losing session in the last six sessions and falling more than 37% from its all-time high last month.
Why is MicroStrategy going down?
On Monday, MicroStrategy announced that it sold $561 million in common stock to purchase an additional 5,262 Bitcoins at an average price of $106,662 per coin. This brings the company’s total Bitcoin holdings to a staggering 444,262 BTC.
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However, both the size and timing of this purchase raised eyebrows among traders and analysts.
The last Bitcoin purchase was Michael TaylorThe smallest to date. It’s a stark contrast to the bold and expensive acquisitions that have defined its crypto strategy until now.
The average price paid for the new Bitcoin stash is about 12% above current levels. Even more telling, the price surpasses December 17’s record close of $106,151 per Bitcoin, an unusual move for a company known for strategically buying on dips.
The critics did not hold back. Peter Schiffa well-known Bitcoin skeptic, attacked Saylor on X, saying:
“It appears to be running out of steam to continue propping up Bitcoin. Additionally, not only is this its smallest purchase, but it is also the first time its average purchase price has been above the market price on Monday when it revealed the purchase”.
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Meanwhile, the market reaction reflected growing unease.
“$MSTR still seems pretty heavy,” wrote the Markets & Mayhem account on today’s consumers, high-beta-loving speculators.
A risky game of leverage
MicroStrategy’s deep ties to Bitcoin have been both its crown jewel and its Achilles heel. With more than $41 billion worth of Bitcoin on its balance sheet as of December 2024, the company is inextricably linked to the volatile movements of the cryptocurrency market.