Shares of Strategy (MSTR) fell 5.7% on Monday despite the so-called Bitcoin treasury company buying another 20,356 bitcoin for $2 billion to bring its total holdings to 499,096. Bitcoin’s (BTC) price fell below $90,000 yesterday and it continues to drop today. MSTR stock is down another 4% in pre-market trading.
Strategy, which recently changed its name from MicroStrategy, owns 2.5% of the total bitcoin supply and 2.3% of all that will become available.
The purchase of the leading cryptocurrency comes as Strategy issued $2 billion in convertible notes last week as part of its plan to raise $42 billion to buy even more Bitcoin. The notes, which mature in 2030, carry a 0% coupon.
Bloomberg notes the market may be experiencing “crypto fatigue.” Strategy isn’t the only stock issuing notes to buy bitcoin, with MARA Holdings (MARA), Riot Platforms (RIOT), and Bitdeer Technologies Group (BTDR) all jumping onto the bandwagon MSTR started.
In all, they have offered $2 billion worth of debt, which coupled with the $9 billion from Strategy, represents nearly one-fifth of all the crypto-backed debt issued over the past year or so. Bloomberg said Strategy had to sweeten the terms of convertible notes to attract buyers while the preferred stock it issued last month came at a significant discount.
GSR Research founder and head of research Manoj Shivdasani said it suggests “that the market is experiencing MSTR/crypto fatigue.”
Strategy’s stock peaked at $593 per share back in November, but has since been on a long, steady decline. MSTR stock has lost nearly half its value since then, and looks to be falling further.
Strategy is still sitting on a near-$15 billion gain on its bitcoin purchases, which have an average buy price of over $66,000. While investors feel they are getting exposure to crypto by buying MSTR stock, Strategy has massively diluted shareholders. It wants to raise the number of shares outstanding from 330 million to 10.33 billion, a 31-fold increase.
