MSTR Stock Ends Week Lowest Since November 2022 As Bitcoin Plummets

Bitcoin prices dropped below the $60,000 level, dropping nearly 18% this week.

• Strategy Inc. broke its three-year streak of exclusive accumulation by selling $2.5 million in Bitcoin to fund structural dividend payments. 
• Peter Schiff warns of a potential “Crypto Black Monday.”
• Traders are increasingly betting against MSTR. 

Shares of Strategy (MSTR) fell 7% on Friday and slipped 1% after-hours, marking its worst week since November 2022, tracking the fall in Bitcoin prices.

Bitcoin prices fell on Friday and dropped briefly below the $60,000 level, leaving its losses this week at almost 18%. The Grayscale Bitcoin Mini Trust ETF (BTC) dropped 18% this week, its worst week on record. 

The sell-off comes on the back of an announcement earlier this week that Strategy had sold 32 Bitcoins in its first-ever sale since 2022, triggering a wider sell-off in the cryptocurrency. Strategy has sold Bitcoin only once before in its history, in December 2022. The transaction marked only the second time Strategy has sold any of its digital tokens since establishing its reserve strategy in August 2020. 

With a total acquisition of 843,738 Bitcoins across 110 separate transactions valued at nearly $64 billion, as per FT calculations, Strategy remains the top corporate Bitcoin holder. The publicly traded firm has long advocated for the "hodl" philosophy—a term in crypto culture signifying the commitment to maintain holdings indefinitely—specifically targeting retail investors. However, this long-standing approach was recently interrupted by a divestment last week.

While the transaction size was modest relative to Strategy's total balance sheet, the sell-off has spooked crypto investors who feared it could signal future, more substantial liquidations. 

Investor flows around Saylor’s Strategy (MSTR) and the company’s variable-rate preferred stock STRC are turning bearish this week after traders had been more balanced in the preceding month, despite a steady decline in Bitcoin that began in mid-May, CNBC reported. 

“There’s a higher Michael Saylor risk factor being priced in right now after he touted STRC as a strategy to avoid selling Bitcoin but then moved away from that, spending cash he said would be on the balance sheet to buy back bonds, and then selling Bitcoin,” said David Dziekanski, CEO at Quantify Funds, told CNBC in an interview on Friday. 

Wall Street Views On MSTR

On Wednesday, Canaccord analyst Joseph Vafi lowered the price target on Strategy by more than 27%, to $163 from $224, and kept a ‘Buy’ rating on the shares, following its recent disclosure of a Bitcoin sale.

Canaccord also added that the company was educating the market that selling Bitcoin to fund dividends sometimes makes more long-term sense than selling Strategy shares.

Earlier this week, Mizuho also lowered the price target on Strategy to $265 from $320 and maintained an ‘Outperform’ rating on the shares, noting that it remains constructive on the company despite the "crypto winter" persisting.

Peter Schiff Sounds Alarm On Potential “Crypto Black Monday”

Bitcoin critic Peter Schiff said in a post on X that if the cryptocurrency’s recent lows are broken again, it could trigger more panic selling and a potential “Crypto Black Monday.”  

MSTR Stock: Retail Traders Unnerved

Retail sentiment on Stocktwits for MSTR was “extremely bearish” with “extremely high” message volumes. 

Retail chatter on MSTR stock has jumped 195% over the past week, 666% over the past three months, and 294% over the past year. 

A user urged retail investors to exit MSTR stock. 

MSTR stock has lost 23.8% year-to-date.

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