MicroStrategy, now known as Strategy, has decided to halt its Bitcoin purchases amidst the recent market crash, with Bitcoin dropping below $80,000. The company failed to acquire any BTC between March 31 and April 6, a significant deviation from their usual practice of purchasing Bitcoin every other week. This decision comes on the heels of the company’s significant Bitcoin purchases in previous weeks, with one purchase totaling 22,048 BTC for $1.92 billion. However, the recent drop in Bitcoin price has caused Strategy to pause its buying spree, risking their previous investments turning into losses.
In the first quarter of this year, MicroStrategy bought 80,715 BTC for $7.66 billion at an average price of $94,922. Currently, the company holds 528,185 BTC, which it purchased for $35.63 billion at an average price of $67,458 per Bitcoin. With the recent decline in Bitcoin price, Strategy is facing an unrealized loss of $5.91 billion on its digital assets for the first quarter. This could lead to the company offloading some of its coins, potentially impacting the market sentiment negatively. Considering the significant amount of Bitcoin the company holds, any move to sell could have widespread effects on the market.
The MSTR stock, which is closely tied to the price of Bitcoin, has also suffered a decline of over 13%. Currently trading around $256, the stock has lost all its gains from earlier in the year and now boasts a year-to-date loss of 8%. This decline is not solely attributed to the drop in Bitcoin price but also to external factors such as Donald Trump’s tariffs that have put the US stock market on the brink of entering bear market territory. The S&P 500 and Nasdaq are also facing significant losses, further exacerbating MSTR’s decline.
As Trump’s trade war escalates and market conditions remain uncertain, MSTR is at risk of suffering further declines in its stock price. The strong positive correlation between Bitcoin and MSTR stock means that any negative sentiment towards Bitcoin could also impact the company’s stock price. Therefore, Strategy’s decision to halt Bitcoin purchases and potential sale of some coins could have ripple effects on both the cryptocurrency market and the stock market. Investors are closely watching the situation to see how MicroStrategy navigates these challenging market conditions and how it could impact their investments.
