What's Behind Microstrategy's Stock Fall?

One of the first companies to make large investments in bitcoin has suffered a considerable drop in the value of its shares.

The name Microstrategy may not be too familiar, but it is a company based in Virginia, United States, that offers business intelligence software solutions for companies (in fact, it is the largest in its field). However, in the bitcoin world, it is widely known for being one of the first companies to make a multi-million dollar investment in bitcoin.

Michael Saylor, CEO of the company is convinced of the potential of the cryptocurrency, and classified it as “digital gold”: “Bitcoin is digital gold, harder, stronger, faster and smarter than any money that came before it" he pointed.

With the price of bitcoin skyrocketing, Microstrategy shares would have to follow the same path. However, in February of this year Microstrategy's shares were trading at just over USD 1300, however, now its shares have fallen to USD 620 dollars. This drop is dramatic, it is more than half, in less than a month. However, we must not forget that before the company bought bitcoin for the first time, the value of its shares was around a modest USD 100, he said. Cointelegraph. Similarly, we must bear in mind that the first large purchases of bitcoin were made when its value was around USD 10 per BTC. That is, your investment has quadrupled given the price of bitcoin to date.

Microstrategy has a little more than 91,00O BTC, whose value to date exceeds $ 47,000 for each BTC (a simple multiplication reveals the immense figure that this represents). However, despite the drop, they are still buying bitcoin. In fact, recently, they bought 205 BTC for $ 10 million (some $ 48 per BTC). Although this amount is quite small, it is understood as a symbolic purchase to represent confidence in the cryptocurrency, and the absence of any intention to sell.

But the most important question remains unanswered, why did their shares drop? Apparently the answer will be found in an external factor that should not only concern Microstrategy, but everyone in general. According to Bitcoin Journal, there is a general tension in the markets given the statements of the president of the US Federal Reserve, Jesse Powell. But what did he say? Or rather, what did I stop saying?

Given the rise in ten-year yields of US Treasuries, and the consideration of this fact as a sign of weakness in the economy, as it happened in the moments before the recessions of 2000 and 2008, it was expected that the Chairman of the Federal Reserve said something about it, but this did not happen. In the words of the Wall Street Journal"Some analysts said their latest statements did little to ease investor fears about rising bond yields."..."the market was looking for a little more tranquility and did not get itSaid Krishna Guha, head of global policy and central bank strategy at Evercore ISI.

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Marilú Lazo
Lawyer from the Pontificia Universidad Católica del Perú (PUCP). Director of The Crypto Legal Blog, she has experience in corporate advice, consumer protection, as well as in matters of personal data protection and new technologies.


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