Strategy stock (MSTR) falls as Bitcoin slump persists despite $82M purchase

Strategy (formerly known as MicroStrategy) shares MSTR fell on Monday as the broader crypto market struggled, even as the company added more bitcoins in the preceding week.

The Bitcoin treasury company expanded its holdings with another $81.9 million purchase of the cryptocurrency.

The stock fell 2.35% in trading, extending its losses amid a broader downturn in digital assets.

Shares were down nearly 18% for the year through Friday's close, while the company has seen its stock decline 47% over the past year.

The latest purchase comes as Bitcoin faces pressure from expectations of further Federal Reserve interest rate hikes, concerns about artificial intelligence spending and uncertainty surrounding the regulatory outlook for cryptocurrency-related products.

Strategy disclosed in a filing with the Securities and Exchange Commission on Monday that it purchased 1,036 Bitcoin between November 2 and November 8. T

he company paid an average of $79,012 per token, bringing the total cost to approximately $81.9 million.

Strategy expands Bitcoin holdings to 850,364 BTC

The latest acquisition takes Strategy's Bitcoin holdings to 850,364 BTC, representing more than 4% of the cryptocurrency's total supply cap.

The company has spent approximately $64.2 billion acquiring its Bitcoin holdings, at an average purchase price of $75,456 per token, including fees and expenses.

Strategy funded the latest acquisition through proceeds from sales of its Class A common stock under its at-the-market programme.

During the week ended November 8, the company sold 2,051,348 MSTR shares for approximately $283.8 million.

It said around $18.34 billion worth of shares remained available for issuance and sale under the programme.

The company also used its US dollar reserve to repurchase 1,887,464 shares of its Series A perpetual Stretch preferred stock, known as STRC, for approximately $188.3 million.

A further $2.1 million from the reserve was used to fund dividends on its preferred stocks.

As of November 8, Strategy had $4.77 billion in its USD Reserve and $146.2 million in USD Cash balances.

The USD Reserve is used to cover preferred stock dividends and interest on outstanding debt, while the cash account supports broader treasury operations, including Bitcoin purchases and reserve expansion.

Bitcoin faces pressure from interest rates and AI concerns

Bitcoin was down around 1.4% over the 24 hours to early Monday, extending its recent decline.

The cryptocurrency faces several potential headwinds.

Investors are increasingly expecting the Federal Reserve to continue raising interest rates to contain inflation.

Higher borrowing costs tend to weigh on risk-sensitive assets, including cryptocurrencies.

Concerns about a slowdown in artificial intelligence spending could also affect Bitcoin.

The cryptocurrency has tended to move in tandem with technology stocks, which have recently faced pressure amid uncertainty over the outlook for AI investment.

CFTC approval faces legal challenge

The regulatory outlook is another factor investors are monitoring.

Last week, the Commodity Futures Trading Commission approved the trading of perpetual futures, contracts that allow investors to speculate on an asset's price without owning it.

However, the Capital Markets Alliance, a trade group, quickly sued the regulator in an effort to halt the approval.

The decision could have implications for the expansion of regulated cryptocurrency products in the US.

Cantor analyst Gareth Gacetta said in a Barron's report that the approval could be “another meaningful step toward bringing products historically concentrated on offshore crypto venues into regulated US markets.”

AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.