The company revealed on paper a crucial loss on its Bitcoin holdings amid the price collapse. Tesla was also affected by this drop.
MicroStrategy, the enterprise software entity and Bitcoin’s most prominent institutional whale, recently experienced how its share price crumbled due to a steep pullback in the market. According to data provided by Yahoo! Finance, shares of the company, under the MSTR ticket, reached a depth registered at 23% since closing on Friday.
MicroStrategy shares were trading at $155 after closing slightly above $200 on Friday. The price shows the lowest stage for the company’s shares since September 2020.
The stock fall arrived due to a forced correction in the digital asset market. Bitcoin crumbled below $23,000 on Monday morning as the global digital currency market capitalization went below $1 trillion, a level not experienced since early 2021.
Tesla and MicroStrategy lost $1.5 Billion
The slumping bite has also impacted MicroStrategy’s very gypsy Bitcoin investment. Managed by Michael Saylor, MicroStrategy has been acquiring Bitcoin fastly since August 2020, collecting almost 130,000 coins.
While the company started investing in the flagship digital asset when it was trading at around $12,000, overall, purchases happened at an average that surrounds $30,700 per BTC, a figure registered below the $23,300 that Bitcoin previously had.
After noticing this data, MicroStrategy deployed at least $3.9 billion in the last two years, going after its Bitcoin holding plans. Considering that the first digital asset went to $22,900, Saylor’s entity faced an unexpected loss of just over $1 billion.
According to information provided by Bitcoin Treasuries, that loss on Bitcoin holdings got registered at around $950 million. Meanwhile, MicroStrategy is not the only entity with bets on crypto and is facing losses on its BTC holding during these difficult times.
Tesla, the electric carmaker owned by Elon Musk, which acquired more than 40,000 bitcoins during the 2021 bull market, is in precarious conditions too. Spending $1.5 billion Tesla to purchase Bitcoin is now worth about $500 million less, and together, both whales registered losses estimated at $1.5 billion (on paper).
Crypto-related Entities are Suffering During these Times
The collapse seems to be one tentacle of a harsher trend experienced in global stock markets, facing macroeconomic headwinds, as CoinDesk notes. Nasdaq 100 futures went down to 2.8%, and S&P 500 futures also sank 2.4%. Amidst this panorama, stocks of entities connected to the crypto space look affected.
On the other hand, shares of the Coinbase exchange and some digital asset mining entities also faced losses in pre-market. Coinbase shares crumbled down 8%, according to data provided by Yahoo! Finance, while Marathon Digital (MARA), Riot Blockchain (RIOT), and Hut 8 (HUT) all experienced double-digit percentage decay.
The shares of MicroStrategy and these other entities got acknowledged by traditional investors as indirect exposure to digital assets. It is vital to consider that Tesla’s stock price also crumbled to a percentage registered at 5% amid the harsh panorama observed in the markets.
By: Jenson Nuñez
