MicroStrategy Dot Com Volatility Good Bitcoin Preparation

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  • MicroStrategy’s $250 million Bitcoin purchase in August dropped by 15% just weeks afterwards
  • Some were worried they might dump some or all of their holdings if Bitcoin’s price fell further
  • One look at the history of the MicroStrategy share price shows they are not frightened of volatility

MicroStrategy made headlines in August when they purchased $250 million worth of Bitcoin, and even more headlines when that Bitcoin lost 15% of its value just three weeks later, losing them $37.5 million at a stroke. However, those who thought that MicroStrategy might have fretted about the volatility of their Bitcoin investment clearly haven’t taken a look at MicroStrategy’s share price history, especially during the dot com boom and bust. For a company who rode the dot com boom and bust, a 15% drop is catnip.

From $3,330 to $4.40 in Under Three Years

MicroStrategy was founded in 1989 and went public in 1998, at a time when internet companies were seeing massive investment during the advent of the internet age. Like many of these companies, MicroStrategy was listed on the tech-heavy NASDAQ exchange, which was the place to be during the dot com boom.

It took over a year for the MicroStrategy share price to double, but by late 1999 the dot com boom was reaching its peak, which was reflected in what happened to MicroStrategy next – the share price pulled a Bitcoin and rocketed from $200 in September 1999 to an astonishing $3,330 just six months later

Bitcoin fans will recognize what happened next – the dot com bubble burst in March 2000 and the MicroStrategy share price crashed, losing all its gains and returning to $200 within just three weeks. The share price bleed out continued for a further two years, bottoming out at a scarcely believable $4.40 in July 2002 – a 99.86% drawdown:

Microstrategy share price 1

MicroStrategy Bounces Back

The story since then has been one of steady recovery, with the share price recovering and eventually passing $200 again in August 2015. Having consolidated underneath this value in the following five years, the MicroStrategy share price received a boost on the back of the August Bitcoin announcement, rising from $122 to $175 in the weeks since then.

Microstrategy share price 2

The Bitcoin influence has clearly had a positive effect on the MicroStrategy share price as well as the company’s balance sheet, but anyone who thought that the company might get cold feet when Bitcoin dropped soon after their purchase just needs to take one look at the share price history to know that MicroStrategy are made of sterner stuff.