With investments in Bitcoin and the use of leverage strategies, MicroStrategy's (MSTR) stock price soared from under $200 to nearly $600, achieving nearly three times growth in the second half of the year.
Despite experiencing a significant retracement recently, compared to its stock price of about $12 when it started accumulating Bitcoin in August 2020, it has surged more than 26 times, becoming one of the most astonishing stocks in the U.S. stock market during the same period.
MicroStrategy initially relied on steady growth from company performance, and later on leveraged Bitcoin strategies, carving out a unique path. Such a result may even be hard for investment giant Warren Buffett to understand.
However, will this leverage strategy trigger a crisis for MicroStrategy and subsequently impact Bitcoin, leading to a spiral decline similar to LUNA and UST?
Recently, there has indeed been such a concerned sentiment in the market, as MicroStrategy's stock price movements are closely related to Bitcoin, mainly because MicroStrategy has recently benefited from Bitcoin's rise, forming a high degree of bundling with Bitcoin prices.
But importantly, this bundling is one-way, meaning MicroStrategy is more affected by Bitcoin than the other way around. Therefore, the bundling phenomenon in the short term is merely due to MicroStrategy being in the spotlight recently and running parallel to Bitcoin for a long time, creating market inertia, which leads to the illusion that Bitcoin also declines when MicroStrategy drops. Additionally, the short-term speculation of Bitcoin also needs to correct.
The question of whether the crypto market (especially altcoins) will be affected by MicroStrategy and decline is more about short-term market sentiment fluctuations.
On Monday and Tuesday, MicroStrategy had two consecutive days of large bearish candles. So now the question is, has the risk of MicroStrategy been released, and have the shorts taken profits? Will Bitcoin continue to decline?
I think if Xiangyuan is not foolish, they should take profits. From the peak of MicroStrategy's stock price reaching $543 on November 21 to today's closing at $353, along with the fluctuations in Bitcoin prices during the same period, we can see that, except for weekends, the short-term trends of Bitcoin and altcoins have indeed been influenced by MicroStrategy, but this influence has its limits.
Currently, MicroStrategy's stock price has relatively entered a safe position. In investing, both rises and falls come with risks, but when the trend is clear and the decline reaches a certain extent, it often harbors new opportunities.
I feel somewhat annoyed with those who complain about the market every time it drops and miss out on opportunities. From the perspective of the medium-term monthly chart, investors who bought the dip in August experienced multiple significant retracements and retail panic, but the big players kept accumulating. Looking back now, selling at any time would have been a mistake, as many altcoins have surged three to five times. If given another opportunity like this in the chart, would you buy the dip???