Strategy (NASDAQ: MSTR)

Formerly known as MicroStrategy, Strategy has recently faced a decline in the stock market.

MSTR shares saw a 5.57% drop on Friday, March 7, closing at $287.18. In the extended session, the shares dropped another 5.46%, leading to a Monday pre-market value of $271.50.

The decline in MSTR shares correlates with Bitcoin’s (BTC) drop from $86,773 to $83,126 at press time, which is a key reason for the stock’s poor performance.

How Safe is Strategy from a Bitcoin Unrealized Loss

Despite its recent headlines for acquiring a large amount of Bitcoin near its all-time high, shareholders need not fear immediate losses. Michael Saylor’s firm has been dollar-cost-averaging into its BTC treasury. Various sources estimate the average Bitcoin purchase price to be between $62,473 and $66,357. With BTC currently valued at $83,126, an unrealized loss remains distant, although the risk is present due to the recent $9,585 weekly drop.

Why Bitcoin Price is Falling

Several external factors have contributed to Bitcoin’s decline, which has, in turn, affected MSTR’s stock price. The cryptocurrency market reacts heavily to macroeconomic news, notably the ongoing trade war initiated by President Donald Trump. The stock market selloff has reinforced the declining trend in digital assets.

Despite expectations that a strategic Bitcoin reserve would positively impact the market, the lack of actionable plans from President Trump has led to disappointment and further downturns.

Additionally, the introduction of spot BTC exchange-traded funds (ETFs) expected in January 2024 has contributed to selloffs, affecting MSTR’s stock.