Market Reaction to Bitcoin's Price Drop
The approximately 5% drop in Bitcoin prices during the day was quickly reflected in stocks as the US markets opened.
MicroStrategy (Strategy Inc.), a company with a high leverage in Bitcoin, was one of the companies most heavily affected by the sharp sell-off.
MicroStrategy's Financial Performance
MicroStrategy's Class A stock closed at $164.92, a 6.92% decline. The stock has lost 37.69% of its value in the past month, clearly reflecting the deterioration in investor risk appetite.
The company's massive Bitcoin portfolio, which currently holds 650,000 BTC, has an average value of $74,436. Despite the decline, the portfolio's total value is $55.94 billion, still representing a 15.63% gain.
Broader Market Trends
The selling pressure in the market wasn't limited to MicroStrategy. US indices also followed the cryptocurrency decline. The S&P 500 fell 0.5%, the Nasdaq 0.7%, and the Dow Jones Industrial Average 0.4%.
Profit-taking was particularly notable in AI stocks, which are often discussed due to their high valuations: Broadcom fell more than 3%, while Meta and Alphabet fell more than 1%. Synopsys shares rose following NVIDIA's investment news.
Bitcoin's Price Movement
Bitcoin, meanwhile, plunged below $85,000 during the day, adding further pressure to the market. Having tested below $90,000 in late November, BTC began December with volatility and is struggling to hold onto critical psychological levels.
Historical December Performance
However, historically, December is generally known as a strong month. Data shows that the S&P 500 has averaged more than a 1% gain in December since 1950.