Buying More BTC Can’t Save Microstrategy’s Shares From Crashing

Buying more BTC can’t save Microstrategy’s shares from crashing by 50% as the BTC price had one of the biggest corrections since the bull phase started and struggled to reclaim $50K. The scenario is nowhere near as bad for the cryptocurrency as it is for Microstrategy though so let’s read more in our latest BTC news.

The company’s share price benefited initially from purchasing BTC and it wasn’t enough to fight off the profit-taking, having made a 58% correction in Microstrategy. The company first revealed that it bought a sum of BTC to add to its corporate treasure reserves and from then on, Michael Saylor the CEO of the company tripled down on the initial purchase. The price per BTC increased dramatically from $10,000 to $50,000 and along with the price, the company’s shares increased as fast when investors used the company to gain exposure to the cryptocurrency.

As BTC started correcting in the macro-environment that was unpleasant, Microstrategy stock shares dropped by 58% and the charts show that this parabola is now broken, suggesting that the correction is not finished yet. As for why Microstrategy is suffering now, it could be due to the stock market jitters but it could be a sign of something else.  The orange line seen on the charts is the BTC/USD price chart from Coinbase and we can see that not every peak was followed perfectly but that the path is close enough to suggest a correlation.

If there’s one, either BTC will correct another 20% or there’s something else happening. As for what are the other reasons that could exist for the divergence, it could be because of the more ways to become exposed to BTC that now exist in the traditional markets than there was a year ago. Another alternative is that CEO Michael Saylor and his purchase spree could be seen as irrational with former believers jumping ship. Saylor is one of the BTC biggest supporters but that doesn’t always place bets at the right time.

Saylor was seen as the biggest loser in the dot com bubble but the internet was widely adopted since. Few argued that BTC will do the same and that buying more BTC won’t save him, but will this scenario hit Saylor again or will it play out differently?