MicroStrategy Starting to Recover from Massive Drop

On Tuesday, MicroStrategy (MSTR) stock started to slip, in line with how Bitcoin (BTC) was falling. The stock dropped about 18% in two days, falling precipitously.

At first glance, it seems strange that a business stock for an analytics software company would fall in proportion to a cryptocurrency token, but that is exactly what has happened. MicroStrategy’s leadership has very publicly talked about their investment in Bitcoin. This software company is the largest single investor in Bitcoin, with millions of dollars’ worth of Bitcoin in their possession.

One of the company’s co-founders even publicly sold many of his MicroStrategy shares recently to buy more bitcoin. If Bitcoin was doing well right now, that would not be an issue, but the coin has fallen below $60,000 this week, which places it back to late February levels.

Will MicroStrategy Recover?

We are starting to see some positive news for MicroStrategy stock today. For Thursday morning, the stock has jumped 3.36%, but it is not nearly enough to make back the losses that occurred already this week. This has been one of the sharpest and largest declines for the coin this year, and investors are starting to wonder if MicroStrategy tying its wagon to Bitcoin is really the best move.

We do expect both Bitcoin and MicroStrategy to recover, but that may not happen until much later in the year. Right now, both of these instruments are low and have been struggling as of late, so buying the dip might be a smart move.  

Bitcoin has proven to be incredibly resilient over the years, and most analysts expect the current downturn to be only temporary and think that the coin will soar much higher in the near future. Right now, MicroStrategy has the job of convincing its shareholders that Bitcoin and the company will turn around soon.