Strategy Stock ($MSTR) has attracted attention this morning due to its ongoing aggressive accumulation of Bitcoin, despite experiencing a steep decline in share value. On Tuesday, the stock price for the Bitcoin-focused firm plummeted by more than 7% during early trading sessions, even as the company reported surpassing the significant milestone of 700,000 BTC in its treasury.
The latest acquisition, announced on January 20, has seen Strategy add 22,305 Bitcoin to its reserves at an average price of $95,284 per coin, bringing its total holdings to approximately 709,715 BTC. This major purchase was financed through the company”s at-the-market (ATM) equity and preferred stock programs, which successfully generated around $2.125 billion in net proceeds between January 12 and 19. The funding involved the sale of 2.95 million STRC variable-rate preferred shares and 10.4 million MSTR Class A common shares, along with smaller amounts raised via STRK preferred stock.
While this acquisition solidifies Strategy”s position as the largest corporate holder of Bitcoin, accounting for over 3% of the total circulating supply of the cryptocurrency, the drop in stock price underscores the close correlation between Strategy”s share performance and the price fluctuations of Bitcoin. The price of Bitcoin has experienced a sharp decline of over 5% in just 36 hours, falling below $90,000, driven by macroeconomic uncertainties and increasing scrutiny over corporate Bitcoin treasuries, which has unsettled investors.
A notable $4,000 decrease on Sunday night was partly attributed to the liquidation of over $500 million in crypto derivatives. Analysts suggest that Strategy”s recent stock weakness is linked to its issuance of millions of new shares for the purpose of Bitcoin purchases, with TD Cowen recently lowering its price target for MSTR to $440, citing a “weaker outlook for Bitcoin yield.”
Despite the recent downturn, institutional interest in Strategy remains significant. Last week, Vanguard Group revealed a $505 million investment in MSTR, marking its entry into the company. Technical analysts have identified a potential inverted head-and-shoulders pattern on the daily chart, indicating a possible bullish reversal if shares can break above $175. However, a failure to maintain above $168 could result in a decline below $160.
The latest acquisition of Bitcoin occurred at a cost exceeding Strategy”s historical average of $75,979 per coin, reflecting the company”s commitment to expanding its holdings despite higher prices. CEO Michael Saylor has consistently highlighted the firm”s “capital markets-to-Bitcoin” strategy, leveraging equity issuance to enhance its Bitcoin accumulation.
During his address at the Bitcoin MENA conference last year, Saylor articulated the vision of Bitcoin as a foundational element of a new era in digital capital and credit, rather than merely an investment vehicle. He remarked that major U.S. banks have transitioned from cautious observers to providers of Bitcoin custody and credit solutions. Saylor proposed that, similar to gold in the past, Bitcoin could serve as the backbone of a global digital credit system, aligning long-term growth with investor returns.
