Strategy’s Market Cap Falls Below Its Bitcoin Holdings Amid BTC Drop

Bitcoin's recent drop below $90,000 has raised concerns for Strategy, the largest corporate holder of Bitcoin. Traders are questioning if the company's stock, MSTR, can withstand another downturn as Bitcoin approaches its average purchase price.

Bitcoin is currently trading near $86,900, a 21% decline over the past month.
Some view this as the start of a bear market, while others see potential for a year-end rally.

Market Analysis

Analyst Jason Pizzino notes Bitcoin fell 10% since November 28, with increased selling activity.
Pizzino indicates potential for a short rebound if buyers regain control.
Historically, falling below the 200-day moving average leads to a recovery period of two to three months.
January to early February may be crucial for a price recovery attempt.

Strategy's Challenges

Strategy's market cap is around $45.7 billion, less than its Bitcoin holdings valued at $55.9 billion.
The company owns approximately 650,000 BTC.
MSTR's value has dropped 57% since October, and it has formed a $1.44 billion cash reserve.
CEO Phong Le mentioned the possibility of selling Bitcoin under extreme conditions.
Concerns about removal from major stock indices could lead to significant selling pressure.
Strategy's average Bitcoin purchase price is $74,436; further declines could erase gains.