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MicroStrategy Stock Crashes 50 Percent Since Bitcoin Pumpers Said Michael Saylor Attacked U.S. Dollar, World’s Reserve Currency

MicroStrategy Stock Crashes 50 Percent Since Bitcoin Pumpers Said Michael Saylor Attacked U.S. Dollar, World’s Reserve Currency

whales

Image: MMG

bitcoin
Image: MMG

When MicroStrategy CEO Michael Saylor began stockpiling bitcoin in August as a hedge against a devaluing dollar, stock in his Virginia-based enterprise software company was barely trading at $135.

Saylor made his first bitcoin purchase on Aug. 11 and the MSTR price took off, hitting a peak of $1,272.94 per share on Feb. 9, before plummeting to $629 within 17 days.

MSTR was trading at $640.03 as of this writing.

Saylor is the biggest bitcoin whale right now, having purchased 90,859 bitcoins at about $24,063 each for a total of $2.186 billion, according to Securities and Exchange Commission filings. Most of those bitcoins were bought with funds raised in debt offerings, part of Saylor’s effort to move away from what he considers a devalued U.S. currency, Washington Business Journals reported.

On the day MicroStrategy confirmed that it had bought 210 more bitcoins for $10 million, MicroStrategy’s stock hit a local low of $628, CoinTelegraph reported.

“The volatility is a commentary on the ups and downs of bitcoin in its latest bull run, which has been characterized by wild swings in both directions,” William Suberg wrote for CoinTelegraph.

“This may be one of the greatest displays of conviction in public market history,” tweeted Anthony Pompliano, co-founder of Morgan Creek Digital, a hedge fund that specializes in blockchain technology and digital assets.

Not everyone is celebrating.

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Saylor’s effort to move away from what he considers a devalued U.S. currency is a gamble that might not pay off, according to Marc Lichtenfeld, chief income strategist at The Oxford Group. It leaves the company vulnerable to a volatile asset that could swing up to 10 percent in value in a single day.

“I think MicroStrategy is being completely irresponsible with shareholders’ capital by putting so much of their assets into a very speculative and volatile asset,” Lichtenfeld told Washington Business Journal. “I have never seen a company do this. This is beyond the excesses I have seen during the dot-com boom, and I think it makes them very, very vulnerable.”

Saylor has done something unusual, turning his unremarkable software company into “more like a bitcoin investment vehicle that happens to make software,” Jacob Silverman wrote for The New Republic.