MicroStrategy, the bitcoin-focused public company led by Michael Saylor, stopped its weekly bitcoin purchases last week for the first time in over a year. The halt comes as the company faces a 67% drop in its stock price from last year’s peak and broader market uncertainty.

Breaking a Long Buying Streak

MicroStrategy, which has been buying bitcoin almost every week since early 2023, didn’t add any new bitcoin between March 23 and March 29. That ended a 13-week streak during which the company acquired over 90,000 bitcoins. The company's bitcoin holdings remain steady at 762,099 BTC, purchased at an average price of about $75,694 per coin.

Its approach has been clear: use capital raised through equity and debt offerings to buy bitcoin, turning its shares into a leveraged bet on the cryptocurrency’s future value. But last week, MicroStrategy paused the practice, coinciding with a sharp dip in bitcoin prices and a steep decline in its own stock price.

Stock and Bitcoin Prices Under Pressure

MicroStrategy's shares slid to around $130 last week, down from their peak of $543 in 2023. That’s a loss of 67% in less than a year. The company’s stock dropped 38% just in the past month. Meanwhile, bitcoin itself fell from highs above $126,000 in February to the mid-$80,000s by late March.

On Monday, bitcoin was trading near $89,000, after briefly dipping below $83,000 the previous week. Market sentiment remains divided, with some investors expecting bitcoin to climb back above $100,000, while others forecast a decline toward $69,000.

Capital-Raising Moves Signal Strategic Shift

Despite the buying pause, MicroStrategy expanded its capacity to raise capital last week. It authorized up to $42.1 billion in new equity and preferred stock offerings, nearly doubling its ability to fund purchases.

The company also restructured its preferred stock mix, boosting the floating-rate STRC series while cutting back on the STRK series.

The change suggests MicroStrategy is aiming for more flexible financing tied to interest rates—likely a move to navigate the current volatile market. The firm continues to file new shelf registrations, keeping its options open to issue common and preferred shares as needed.

Index Exclusion Threat Clouds Outlook

MicroStrategy’s troubles go beyond market dips.

MSCI, a leading index provider, flagged the company for possible removal from its indices next year. The reason: MicroStrategy’s large bitcoin holdings make it resemble an investment fund, which MSCI excludes from its benchmarks.

Analysts warn That could trigger massive stock selloffs. JPMorgan estimates outflows could reach $11.6 billion if MicroStrategy is dropped and other similar firms face the same fate. TD Cowen analyst Lance Vitanza called the potential removal "misguided and unfortunate," emphasizing that MicroStrategy is a public operating company, not a typical investment fund.

Even so, the looming threat has pressured the stock, adding to the challenges of growing bitcoin holdings via stock issuance. The company’s market cap recently slipped below the value of its bitcoin stash, limiting its ability to raise equity to buy more bitcoin on a per-share basis.

Can MicroStrategy Weather a Bitcoin Crash?

MicroStrategy says it’s ready to handle big market drops.

The company claims it could survive a bitcoin price crash all the way down to $8,000 per coin without defaulting on debt. At current bitcoin prices around $69,000, its bitcoin reserves are valued at about $49.3 billion, compared to roughly $6 billion in net debt.

Even in a worst-case scenario where bitcoin plunges 88%, their bitcoin assets would still just about cover their outstanding debt. The company claims it can survive tough market shocks because of its solid balance sheet and bitcoin stash.

Still, such a crash would wipe out most of the company’s equity value, leaving shareholders exposed. And with bitcoin’s notoriously volatile price swings, the risk remains a key concern for investors.

MicroStrategy’s break from buying bitcoin shows the tough spot it’s in, tied closely to crypto’s ups and downs. It’s still unclear if the company can keep up its bold bitcoin strategy while dealing with stock market swings and regulatory issues.