Yesterday, MicroStrategy’s stock price closed at $682, thanks in part to the rise in the price of bitcoin.
This level hasn’t been seen since 28 April, when it closed at $680 after also touching $689.
It was on 29 April that a real fall began, ending on 21 May when a low of $447 was reached.
In other words, in less than a month the stock had lost 35% of its value on the stock exchange.
The fact is that MicroStrategy’s stock is now highly correlated to the value of bitcoin, given the huge amount of BTC in the company’s possession.
The price of bitcoin, after peaking on 14 April at almost $65,000, had already fallen to around $55,000 by 28 April, before plummeting to $30,000 on 19 May.
This downward parabola was in fact replicated by MicroStrategy’s share price which, just like BTC, then lateralized for several days around the annual lows.
However, while the price of bitcoin did not rise above $30,000 until 2 July, the price of MicroStrategy shares had already shown signs of recovery on 9 June, when it rose above $500.
On 18 June, it had even climbed back above 600%, a level that was confirmed at the end of June. However, at the beginning of July, a new downward spiral was triggered which led to a low of $492 on 19 July, the day before the price of bitcoin fell below $30,000.
MicroStrategy’s share price also reversed on 21 July, rising in a matter of days to a peak of $695 yesterday, a gain of more than 40% in less than a week.
Yesterday alone, after the weekend break, it went from $539 to $682, a daily gain of 26%.
The fact that the MicroStrategy stock is so correlated to the price of bitcoin also means that it tends to have a volatility more similar to that of cryptocurrencies than other similar stocks, and that the recent gains may not necessarily hold over the next few days.
However, it is interesting that, like any other stock listed on the Nasdaq, its trading is suspended over the weekend, while bitcoin’s trading never stops. In other words, after Sunday’s rise in the price of BTC, yesterday’s rise in MicroStrategy’s share price was in fact far from unexpected.