MicroStrategy (MSTR) spent another $27 million on BitcoinBTC-- in late October 2025, purchasing 220 BTC at an average price of $123,561, just before the cryptocurrency market suffered one of its worst flash crashes in history. The acquisition, funded by proceeds from selling preferred stocks (STRF, STRK, STRD), brought the company's total Bitcoin holdings to 640,250 BTC, with an average acquisition price of $73,000 since 2020 [1]. However, the timing proved costly: Bitcoin plummeted from above $123,000 to as low as $103,000 within days, erasing nearly $19 billion in leveraged positions and triggering widespread panic across crypto and traditional markets [6].
The crash followed a sharp escalation in U.S.-China trade tensions. President Donald Trump announced 100% tariffs on Chinese goods in response to Beijing's rare earth export restrictions, sending shockwaves through global markets. Bitcoin dropped nearly 16% in a single week, while MicroStrategy's stock fell 18%, closing at $297 on October 11-its lowest since early 2024 [2]. Despite its aggressive Bitcoin strategy, MSTR's stock has underperformed its holdings in recent months, shedding 15% in 30 days amid bearish sentiment. The firm's memecoinMEME--, MSTR2100, fared worse, collapsing 30% as technical indicators pointed to further declines [4].
MicroStrategy's funding model has relied heavily on perpetual preferred stock offerings, including the recent $2 billion STRK issue with an 8% annual dividend . These instruments, which raised $5.6 billion year-to-date, have allowed MSTRMSTR-- to accumulate Bitcoin without diluting common shareholders excessively. However, the strategy's success hinges on Bitcoin's ability to stabilize above key resistance levels. Analysts note that if the price holds above $110,000, MSTR could see a rebound, but a breakdown below $100,000 would likely trigger further sell-offs [2].
Institutional confidence in MSTR's Bitcoin-centric approach remains mixed. The California State Teachers' Retirement System (CalSTRS) recently invested $133 million in MSTR, signaling growing acceptance of Bitcoin as a strategic asset [2]. Yet skeptics warn that the company's 85% premium to its Bitcoin net asset value is unsustainable if the crypto market remains volatile. "The premium shrinks with every dip in BTC," noted one analyst, adding that MSTR's ability to secure favorable financing terms could evaporate if market conditions deteriorate [5].
Looking ahead, MSTR's next move will depend on Bitcoin's trajectory and Trump's trade policies. While the president hinted at easing tensions over the weekend, the damage to market sentiment was already done. If Bitcoin stabilizes above $120,000 and institutional demand for Bitcoin-linked assets grows, MSTR could regain momentum. For now, however, the firm remains a barometer of crypto's precarious balance between innovation and volatility .
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