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Bitcoin Price Decline and Market Risks
However, since bitcoin’s prices are volatile, MicroStrategy’s market risks now relate to its bitcoin holdings. Bitcoin dropped below the $100,000 mark, trading at $93,313.96, after previously reaching $108,000. This decline came after the Federal Reserve made pointed statements indicating it would be cautious in the next cuts of interest rates.
MicroStrategy’s share price has tracked Bitcoin’s recent dip, which is currently down 17% over the past week. Some have criticized its leveraged Bitcoin acquisition strategy based on the high price-to-Bitcoin multiple that its shares fetch. While this approach may have a high potential return at the peak of the Bitcoin price, it is highly risky at the low point.
Accordingly, MicroStrategy’s market risks are now closely tied to bitcoin’s market volatility.
Source: cryptonewsland.com
