Strategy (NASDAQ: MSTR) investors are “deeply concerned” by the market’s reaction to the company selling Bitcoin this week, sources told Congress.net on Tuesday.
Sources told Congress.net that large institutional investors holding various MSTR products, including ordinary shares and preferred shares, are concerned that “Strategy could be forced to sell more Bitcoin” and “inadvertently cause Bitcoin’s price and Strategy’s share price to repeatedly cascade down.”
Shares in Strategy dropped more than 9% on Tuesday, extending a two-day losing streak triggered by the firm’s disclosure of a small but symbolically significant Bitcoin sale.
The stock closed at $136.08, putting it down nearly 15% over the past five trading sessions and more than 23% lower on the month. MSTR is now trading more than 70% below its 52-week high of $457.22.
The sell-off follows Strategy’s announcement on Monday that it had sold 32 BTC, worth approximately $2.5 million. While the sum is a tiny fraction of the firm’s total Bitcoin holdings, which are valued at more than $56 billion, investors reacted poorly. Strategy chairman Michael Saylor had previously flagged the possibility of a sale, framing it as a way to manage market expectations, but shareholders have not taken kindly to the execution.
Bitcoin itself has compounded the pressure. The cryptocurrency fell around 5.8% in the 24 hours to Tuesday, trading near $67,288 and sitting more than 46% below its all-time high of $126,080.
Despite the share price pain, analysts at TD Cowen are holding firm on their $400 price target for MSTR, implying a potential gain of close to 200% from current levels. Shares last traded near that mark in August of last year, around the time Bitcoin reached its record peak.
The weakness is not confined to Strategy. Coinbase (COIN) fell more than 4.5% on Tuesday, closing at $173.99. The exchange’s stock is down more than 23% year-to-date and sits nearly 61% below its 52-week high. Analysts at Compass Point this week reiterated a sell-side price target of $140 on COIN, reflecting a further 19% downside from Tuesday’s close.
Ethereum treasury plays were also caught in the downdraft. BitMine Immersion Technologies (BMNR) declined 4.62% to close at $17.98, while Sharplink (SBET) shed 6.14%, finishing the session at $5.81.
Bitcoin miner CleanSpark (CLSK) and BTC services company Fold (FLD) rounded out the session’s notable losers, falling 6.5% and 8.4% to close at $17.58 and $0.87 respectively.
The broad-based selling across crypto equities reflects growing concern that Bitcoin’s recent correction could have further to run, with leveraged plays like Strategy bearing the brunt of investor nerves.
