The shares of MicroStrategy dipped by more than 17% in the previous trading session as Bitcoin recorded huge losses.
Bitcoin, the world's leading cryptocurrency, has sustained huge losses over the past few days. The cryptocurrency lost its support level above the $40k level and is now trading around the $35k mark.
Following the decline in Bitcoin's price over the past week, the shares of MicroStrategy have also taken a hit. MSTR lost more than 17% of its value during Friday's trading session.
MicroStrategy is the company with the highest Bitcoin holdings on its balance sheet. Over the past two years, the company has bought bitcoins worth more than $3 billion. The company's CEO recently stated that he believes Bitcoin is the best hedge against inflation. He said;
"The best defense against inflation is a bitcoin standard. So, I don't really think we could do anything better to position our company in an inflationary environment than to convert our balance sheet into bitcoin."
At press time, MSTR is trading $375 per share. Since the start of the year, MSTR has lost more than 30% of its value, mirroring the performance of Bitcoin and the broader cryptocurrency market.
The decline in the company's stock price can also be attributed to the United States Securities and Exchange Commission (SEC) rejecting the accounting method it was using for bitcoin in its earnings reporting. The SEC said;
"We note your response to prior comment 5, and we object to your adjustment for bitcoin impairment charges in your non-GAAP measures. Please revise to remove this adjustment in future filings."
The broader cryptocurrency market has been underperforming over the last two months. The total cryptocurrency market cap reached an all-time high of $3 trillion in November when BTC and ETH all reached their respective all-time highs.
As of the end of last year, MicroStrategy held 124,391 bitcoins, acquired for around $3.75 billion at an average price of about $30,159 per BTC.