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Finbold 2024-12-24 13:05:53

Why MicroStrategy might collapse below $100 in 2025

MicroStrategy (NASDAQ: MSTR) has been the great beneficiary of the other 2024 boom – the one in the cryptocurrency market . The company’s strategic investment in Bitcoin (BTC), paired with BTC’s own stellar performance, has led to a share price skyrocketing of 384.87% in the year-to-date (YTD) chart and a press time price of $332.23. MSTR stock YTD price chart. Source: Google However, on December 24, 2024, MicroStrategy stock is facing an increasing danger of an imminent plummet, with at least one cause being by the firm’s own design. Specifically, a recent Schedule 14A document filed with the Securities and Exchange Commission (SEC) revealed that Michel Saylor is hoping, with stakeholder approval, to increase the number of MSTR shares by approximately 11 billion. Could MicroStrategy’s latest BTC-buying scheme lead to MSTR stock price collapse? Thus far, MicroStrategy’s various capital-raising drives – all done with the aim of increasing the funds available for additional Bitcoin purchases – have been met with a positive reaction from investors. Still, the intent to increase the number of common shares by 10 billion and preferred equity by 1 billion might, if approved, prove a step too far as it would significantly dilute MSTR equity. Indeed, the plan calls for a thirtyfold increase in the number of shares. On the flip side, even if the so-called 21/21 plan – a plan to raise $42 billion via equity and fixed-income assets to buy more Bitcoin – sends MSTR stock flying back below $100, it would not necessarily be a detrimental development. Ultimately, the planned issuing and its consequences could be either positive or negative for the company and its stakeholders, depending on how high BTC can go and when the current bull cycle in the cryptocurrency market will end. At press time on December 24, Bitcoin is facing strong headwinds and it has, in approximately one week, retraced from its all-time highs (ATH) above $108,000 to the still-impressive $94,000. BTC YTD price chart. Source: Google MicroStrategy goes all in on Bitcoin Such a setup could equally create the perfect opportunity for MicroStrategy – and other traders – to buy the dip, particularly should the recent $250,000 , $350,000 , and $800,000 price target for BTC for 2025 prove correct. Simultaneously, thanks to the rally in the last 12 months and the perpetual volatility of digital assets, further purchases could prove an exceptionally risky maneuver since another ‘crypto winter’ could always be right around the corner. Whatever 2025 brings, by the end of 2024, it has become more evident than ever that Michael Saylor and his firm are going ‘all in’ on Bitcoin. In late November, MicroStrategy executed its largest-ever BTC purchase to the tune of $5.4 billion . In total, MicroStrategy bought more than 200,000 BTC in recent months and, according to the data available at press time, owns more than 400,000 of the cryptocurrency – 2.11% of all Bitcoin in existence, both mined and unmined. Featured image via Shutterstock The post Why MicroStrategy might collapse below $100 in 2025 appeared first on Finbold .

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