Will MicroStrategy 50% Fall Drive Wall Street Away From Bitcoin?

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Last Updated on 23 March 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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Many agree that it was Square’s initial investment in Bitcoin, soon followed by PayPal’s announcement that they would be entering the crypto market as well, which meant the start of the current bull run for Bitcoin.

That bull run has been going one since October – November 2020. Some will point to the fact that Bitcoin’s halving in May of 2020 gave way to an inevitable rise but most agree that institutional money has really started pouring in as of that moment.

One of the companies that has truly gone all out into Bitcoin is Michael Saylor’s MicroStrategy, who bought well over $2 billion worth of Bitcoin by now, at an average price of $24k. Problem for MicroStrategy is that their stock has slumped ever since late January.

Advertentie.

Dotcom and diversification

And when we say slumped, we mean really slumped. From its peak, MicroStrategy stock has now lost more than 50% of it’s value. Of course given the 10% correction that tech stocks have undergone since is part of the explanation, but it also gives Bitcoin critics ammunition to point to the fact that going all in on Bitcoin is a risky thing for a Wall Street company.

Marc Lichtenfeld, Chief Income Strategist at The Oxford Group, claims that MicroStrategy’s stock tumble (down 50% in the past 17 days) proves that investing a large part of your cash in Bitcoin is still a gamble.

Speaking in the Washington Business Standard earlier this week, Lichtenfeld said:

I think MicroStrategy is being completely irresponsible with shareholders’ capital by putting so much of their assets into a very speculative and volatile asset.

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.

As we’ve also recently pointed out, Wall Street media outlets have started to dwell on Saylor’s past as the man who lost the most ever in the 2000 dotcom crisis. At that time, Microstrategy stock lost a whopping 99%.

Of course as a cryptosite we are highly supportive of crypto, but Saylor, unlike Tesla, has made a bet on Bitcoin alone apparently, rather than spreading his risk.

Lichtenfeld commented on Tesla’s buy, stating:

You can argue that they (Telsa) are essentially diversifying a bit, hedging a bit, whereas MicroStrategy, you cannot make a diversification argument because they are all in on this particular asset. I would feel the exact same way if they went all in on physical gold or any other currency or asset.

velishchuk1 / Depositphotos.com