MicroStrategy’s Strategy Amplifies Bitcoin Volatility, Impacting Stock Market and Investors

COINOTAG reports on March 17th that Fish Zhang, co-founder and CEO of Cobo, has shed light on the strategic actions taken by MicroStrategy (MSTR) to manipulate Bitcoin’s inherent volatility. By ingeniously leveraging its Bitcoin holdings, MSTR has effectively enhanced Bitcoin’s fluctuations by a notable factor of 2.5, directly influencing the broader US stock market dynamics. This amplified volatility has caught the attention of professional investors, who are now utilizing these fluctuations for arbitrage opportunities to secure immediate gains. Notably, MSTR has innovatively financed its substantial Bitcoin acquisitions through the issuance of convertible bonds and an ATM issuance strategy. In this complex landscape, ordinary shareholders are exposed to pronounced stock price volatility, facing significant short-term risks, while they passively benefit from an increase in Bitcoin presence per share. Ultimately, long-term Bitcoin holders are likely to reap rewards from a continuous influx of capital and an uptick in Bitcoin prices.