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Monday’s selloff was driven by crypto lender Celsius Network’s announcement that it would halt withdrawals from its platform.
Dreamstime.com
MicroStrategy
and
Coinbase
were plunging Monday, dragged down by a massive
Bitcoin
selloff that brought the cryptocurrency to its
lowest level in 18 months
.
While MicroStrategy (ticker:
MSTR
) derives most of its revenue from software, the company has bet big on Bitcoin, holding more than 129,200 tokens as of March 31. The company’s strategy involves issuing debt to finance more Bitcoin purchases, but has warned that it will be forced to sell Bitcoin if it fails to generate enough cash flow to service the debt.
“If the price of #BTC falls below $3,562 the company could post some other collateral,” tweeted CEO Michael Saylor in May. But he remained optimistic about Bitcoin’s future, tweeting on Friday that Bitcoin had yet to reach its peak.
Bitcoin has been falling gradually since it peaked at $67,802.30 in November 2021. The cryptocurrency was losing 14% on Monday, trading at $23,586. The price is well below MicroStrategy’s average purchase price of $30,700, according to the company’s first-quarter financial report.
Monday’s selloff was driven by crypto lender Celsius Network’s announcement that it would halt withdrawals from its platform. Bitcoin, the largest digital currency, also has been hit by the Federal Reserve’s hawkish plan to raise interest rates and curb inflation.
Shares of MicroStrategy were down 20% to $160.85 on Monday. Other stocks with large exposure to Bitcoin and other cryptocurrencies were also hurting, with
Coinbase
(
COIN
) down 17% and
Block
(
SQ
) down 5%. Block CEO Jack Dorsey had bought Bitcoin for the company’s treasury and expanded Cash App to allow crypto trading.
Write to Sabrina Escobar at [email protected]
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