Strategy’s Stock Plummets Amid Bitcoin Price Drop

Strategy, a company formerly known as MicroStrategy, has seen its stock price (MSTR) plummet by more than 5% due to the recent decline in Bitcoin (BTC) prices. According to the latest data, Strategy’s stock has fallen by 5.65% in pre-market trading, with its price standing at $282.76 at the close of today’s stock trading.

The drop in Strategy’s stock price is believed to be triggered by Bitcoin’s price drop, which fell as low as $87,630 on February 25. This decline has not only impacted Strategy’s stock price but also its premium ratio. As the largest corporate holder of Bitcoin, Strategy’s market capitalization and Bitcoin holdings ratio has fallen to 1.6, down from its peak of 3.4 in November.

Impact on Strategy’s Bitcoin Purchases

According to crypto analyst Miles Deutscher, Strategy may have to slow down its Bitcoin purchasing spree due to the recent price plunge. Deutscher stated:

The premium of $MSTR’s market cap to its underlying $BTC holdings has collapsed from a high of 3.4 in November to only 1.6 now. The lower this number goes, the harder it will be for Saylor to raise more capital for $BTC purchases. It seems like he will have to slow his pace.

This means that Strategy’s ability to raise capital for Bitcoin purchases will be limited, as investors will be unwilling to pay more than the current intrinsic value of Bitcoin.

Bitcoin Price Drop and Its Effects

The recent decline in Bitcoin prices has also led to a decrease in trading activity, limiting demand for dip-buying. As reported earlier, Bitcoin fell by 6.78% on February 25, with Matrixport analysts warning of a potential deeper decline.

For investors looking to stay up-to-date on the latest cryptocurrency news and trends, be sure to check out more articles on Global Crypto News.

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