MicroStrategy's latest round of Bitcoin acquisitions quickly drew attention. Just the day after the company disclosed this large transaction, the price of Bitcoin sharply fell.
On December 14, MicroStrategy announced it spent approximately $980.3 million to acquire 10,645 Bitcoin, at an average price of $92,098 each. At that time, the trading price of Bitcoin was close to recent highs.
At least in the short term, the timing of this transaction is not ideal. The day after MicroStrategy revealed the acquisition news, the price of Bitcoin dropped to around $85,000, even briefly falling below that range. As of the time of writing, the price of Bitcoin is still below $80,000.
The decline in Bitcoin comes at a time of a sell-off triggered by macroeconomic factors, and behind this sell-off are concerns about expectations for a Bank of Japan interest rate hike, leverage liquidation, and risk reduction by market makers. MicroStrategy's acquisition coincided just before this wave of sell-offs.
As Bitcoin prices decline, MicroStrategy's stock price has also plummeted. Over the past five trading days, the stock has fallen more than 25%, significantly underperforming Bitcoin itself.
Although the stock price rebounded slightly today, it remains well below the levels prior to the acquisition announcement.
As of now, MicroStrategy holds 671,268 Bitcoins, valued at approximately $50.33 billion, with an average price of $74,972 per Bitcoin.
In the long run, the company remains profitable.
However, short-term market performance is crucial. With Bitcoin prices nearing $85,000, the book value of the latest batch of Bitcoins has fallen below the value of the Bitcoins it holds.
MicroStrategy's market-to-net asset value (mNAV) is currently about 1.11, meaning its stock price is only about 11% higher than the value of the Bitcoins it holds. As Bitcoin prices drop and stock investors reassess risks, this premium has quickly narrowed.
Investors are not questioning MicroStrategy's logic behind Bitcoin investment, but rather its timing and risk management. The macro risks that triggered the Bitcoin drop were already foreseen. For weeks, the market has been warning about the potential interest rate hike by the Bank of Japan and the threats facing yen carry trades.
Historically, Bitcoin has seen significant sell-offs before and after the Bank of Japan tightens monetary policy. This time is no exception.
Critics argue that MicroStrategy failed to wait for macro conditions to clarify. The company appears to have made large purchases near resistance levels amidst tightening global liquidity.
Is this really a mistake?
It depends on the time frame.
From a trading perspective, the timing of this purchase is poor. Bitcoin immediately dropped, and due to leverage, market sentiment, and the narrowing of net asset premiums, MicroStrategy's stock suffered greater losses.
From a strategic perspective, MicroStrategy has never tried to time the market. The company has always adhered to a long-term accumulation strategy rather than short-term price optimization.
CEO Michael Saylor has repeatedly emphasized that holding more Bitcoin is more important than precise entry.
The real risk lies not in the purchase itself, but in what happens next.
If Bitcoin prices stabilize and macroeconomic pressures ease, MicroStrategy's latest purchase will gradually integrate into its long-term cost base. However, if Bitcoin prices fall further, this decision will still be a focal point for critics.
MicroStrategy may not be the worst Bitcoin buy in 2025, but it could be the most unsettling one.#BTC $BTC
