MicroStrategy turns negative despite bitcoin $100,000 milestone

Cryptocurrency-related stocks saw significant declines on Thursday, even after Bitcoin soared above the $100,000 mark for the first time overnight.

MicroStrategy, which has become synonymous with Bitcoin investment, saw its stock dip by 4.8% after an earlier surge of over 7%. Similarly, Riot Platforms and Marathon Digital Holdings (Mara) fell approximately 5% and more than 4%, respectively. Other notable declines included Robinhood Markets, which dropped 2.7%, and Coinbase Global, which fell by over 3%.

MicroStrategy’s dramatic stock performance is largely attributed to its aggressive Bitcoin acquisition strategy, which has led to an astonishing 2,700% increase since 2020. The company has effectively become a proxy for Bitcoin itself. Coinbase, a major cryptocurrency exchange, and Robinhood, which enables trading in Bitcoin and other cryptocurrencies, are closely tied to Bitcoin’s fortunes. Meanwhile, Mara and Riot Platforms focus on Bitcoin mining and digital infrastructure.

Despite Thursday’s downturn, these stocks’ year-to-date performance remains strong. MicroStrategy has surged nearly 512%, Robinhood has rallied over 205%, and Coinbase has gained more than 84%. In contrast, Mara Holdings has lagged behind with a modest increase of over 5%.

Investor optimism around Bitcoin has been fueled by the recent election of President-elect Donald Trump, raising expectations of a more favorable regulatory environment for cryptocurrencies.
“Despite Bitcoin reaching $100,000 being a significant psychological threshold, the more significant takeaway is that this will increase the likelihood of more institutional and traditional finance investments in the sector,” said Pascal St-Jean, CEO of 3iQ. He added that the price surge reflects a growing accessibility to digital assets for investors.

Additionally, traders have shown increased interest in leveraged MicroStrategy ETFs, with a research note from JPMorgan indicating that inflows into these funds accounted for nearly a third of the record $11 billion inflow into crypto funds in November. Leveraged ETFs can amplify potential gains but also come with increased risk.

As Bitcoin continues to fluctuate, the relationship between cryptocurrency prices and related stocks remains a focal point for investors navigating the evolving digital asset landscape.