Michael Saylor’s Downfalls with Lost Potential of $4.5B with Blowing Bitcoin Crash Under $70K
Michael Saylor’s Strategy is facing an unrealized loss of over $4.5 billion with the downfall of Bitcoin recently crossed the psychological $70,000. The loss also has added pressure to the motions of the MSTR stock as investors react to the potential MSTR may lose more Bitcoin during the bear market.
Per the DropsTab, Strategy’s investment of $54.3 billion is deteriorating around $4.8 billion -a new estimate which adds to Strategy’s unrealized loss. Currently, the Firm has 713,502 BTC locked up with an average price of $76,052 for each.
The company took a hit a few months back at its peak of $69,000 which at the time made MSTR BTC holdings valued at over $80 billion. Last week’s downfall has been the first time the company has been able to slide below the $70,000 range and has added as the first time it has been able to add pressure with the potential for the company to lose more Bitcoin during the bear market.
MSTR stocks have been pressured by the downturn of Bitcoin. Trading data shows that stocks are trading valued at $120 at the pre-market, a loss of $7 and a new multi year low from the previous $129.
MSTR stocks are down over 16% year-to-date, driving concern from investors regarding the exposure the company has with BTC. Bitcoin critic and economist Peter Schiff claims the losses may deepen and with that, shareholders may begin to sell their shares as losses deepen and are terrified of declines.
Analysts have identified a myriad of factors that are evident and affecting the market as it pertains to Bitcoin. Investment bank, Stifel believes Bitcoin could drop under $40,000.
This has been attributed to a combination of factors: historical market cycles, tightening of the Federal reserve, slower crypto regulation coming from the United States, shrinking market liquidity, and heavy outflows from ETF’s.
If Bitcoin has further losses, it becomes increasingly more difficult for Strategy to reduce their losses and therefore, it becomes more difficult to protect the sentiment of shareholders.
Mastr seems to have no intention of selling their Bitcoin, despite the volatility. Recent data shows that there is a 27% chance that the company will lose any BTC before the year ends, showcasing that the market is confident in Saylor’s strategy. The CEO has made it clear that MSTR will rely on the BTC and tolerate the losses before implementing sizable changes with their quantity of BTC.
To recap, despite the crash of the BTC to under $70,000 causing paper losses to Strategies Bitcoin position, MSTR is still positive on the investing thesis. MSTR stock prices incorporate the market’s pessimism, but the data indicates that Saylor is not likely to Bitcoin become less exposed, leaving the shareholders to manage the crypto market’s continued turbulence.
