Why MicroStrategy Stock Crashed in December
According to data from S&P Global Market Intelligence, shares of MicroStrategy (NASDAQ: MSTR) fell 28.5% in December 2022, wrapping up the year 74% lower from a 12-month perspective. The data analytics company has become an alternative idea for investors of Bitcoin (CRYPTO: BTC), as MicroStrategy has converted nearly all of its cash reserves into the leading cryptocurrency.
This tactic exposes MicroStrategy's stock to lots of Bitcoin-based volatility, but that wasn't the driving force behind December's moves. Bitcoin actually closed December's trading 1% higher, outperforming MicroStrategy and the S&P 500 index.
MicroStrategy's December woes weren't directly tied to Bitcoin's pricing, but the market action still started in the cryptocurrency space. The stock's price moves were tightly correlated to the plunging value of the FTX Token and Solana, two altcoins at the heart of the FTX crypto exchange's financial meltdown. In other words, MicroStrategy investors were (and are) deeply concerned about the fallout from the FTX saga hurting other parts of the crypto sector.
Source Fool.com
