MicroStrategy has published a guide on Bitcoin, warning of a potential 93% crash of the asset. In the document presented by Chairman Michael Saylor, the focus is on the risks associated with the assets, while potential benefits are considered to a lesser extent.
The most significant decline, amounting to 93.1%, occurred in 2011, and according to the publication, during one of the years, the worst performance was -83.6%. It is important to note that being right about long-term investments in Bitcoin will not protect investors from short-term losses. "An investor may be confident in Bitcoin's growth and still lose money due to leverage, lack of liquidity, or other factors," – the company stated. This warning is particularly significant, as Saylor himself experienced a crash of his company in 2000 when MicroStrategy's shares fell 62% in one day after a revision of three years of financial statements.
There is additional context. As of September 7, MicroStrategy held 845,050 Bitcoins with an average purchase price of $75,412. With the current market price around $77,106, the company is only 2% above water, which also implies losses on recently acquired assets. For instance, on August 31, MicroStrategy resumed purchasing 4,603 Bitcoins at an average price of $80,318, but this operation lasted only a week. This duality in Saylor's position, on one hand warning of a crash, and on the other – targeting price growth, raises questions about its feasibility, as stated in the guide, the company profits from rising Bitcoin prices. Thus, the warning about a potential crash appears contradictory in the context of MicroStrategy's current actions.
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