Cryptocurrencies
MicroStrategy’s Plunge Shows Risk of Stock as Bitcoin Proxy
- Software firm owns more than 1% of all Bitcoin to be issued
- Company has sold converts twice this month to buy more
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MicroStrategy Inc. investors who bought shares of the biggest corporate holder of Bitcoin to gain amped-up exposure to the digital asset are getting a painful reminder of its brutal volatility.
This week is driving home how the leverage the company deploys to buy Bitcoin is a recipe for explosive moves. MicroStrategy sank 16% on Monday, more than 10 times the drop in Bitcoin. It slumped 5.7% Tuesday as the digital token extended a retreat from record highs. The slide pushed this week’s losses to 20%, the stock’s worst two-day drop since 2022, an abrupt reversal after the shares doubled last month alone.