In a significant development, MicroStrategy (MSTR) sold 32 Bitcoin (BTC) for approximately $2.5 million, marking the company’s first Bitcoin sale since December 2022. This move has triggered a noticeable selloff in the stock market, with MSTR shares declining by 6% to around $150. In a similar fashion, the stock for Coinbase (COIN) also dropped by 5% to approximately $179.50. The decline comes as both companies continue to struggle, with MSTR’s stock down 60% over the past year and COIN down 28%.
The details of the Bitcoin sale were disclosed in an SEC filing, revealing that MicroStrategy executed the sale between May 26 and May 31. The company had previously sold 704 BTC in December 2022 for about $11.8 million. While the 32 BTC sold now represents only a small fraction of MicroStrategy’s vast holdings of 843,706 BTC, the optics of the sale have raised concerns among investors, particularly given that MicroStrategy Executive Chairman Michael Saylor had previously insisted he would not sell any Bitcoins.
Seeking to manage the tax implications of the sale, MicroStrategy CEO Phong Le stated that the sales would be consistent with a cost basis strategy to break even. The proceeds are intended to fund preferred dividends, reflecting a yield of 12%. During the same period, MicroStrategy also sold approximately 801,994 common shares for about $128.3 million.
The negative sentiment surrounding MicroStrategy was further exacerbated when entrepreneur Mark Cuban announced he had sold all his Bitcoin holdings, citing the cryptocurrency’s failure as an inflation hedge while stating that gold performed better. This announcement coincided with MicroStrategy’s filing, amplifying the narrative of a broader rotation out of crypto investments.
On the contrary, Fundstrat’s Tom Lee appeared on CNBC’s SquawkBox to counter the bearish sentiment. He referred to the current market behavior as “rage quitting” and characterized it as a “classic market bottom,” suggesting that Bitcoin (BTC) and Ethereum (ETH) are still positioned as the “future of money.”
Adding to the pressure, Mizuho Financial Group reduced its price target for MSTR stock from $320 to $265 while maintaining an Outperform rating. This revision aligns with a diminished year-end 2027 Bitcoin forecast, now set at $94,000, down from $128,000.
Coinbase, while not facing immediate analyst actions, is similarly affected by the downturn. Its revenue is closely tied to crypto trading volumes, and recent indications suggest an overwhelming 98% probability that COIN closes lower today. Retail positioning appears defensive, with much discussion within the Reddit community leaning towards bearish sentiments.
As the market navigates these recent shifts, key points to watch include a potential announcement from MicroStrategy of a new Bitcoin purchase between June 2 and June 8, the ability of Bitcoin to maintain above the $70,000 threshold, and whether Mizuho’s downgrade prompts additional price target adjustments from other analysts.
Today’s market reactions appear to be driven more by emotions than by fundamentals, suggesting that prudent investors may want to differentiate between the symbolic nature of MicroStrategy’s sale and any real change in the company’s treasury strategy.
