Shares of Michael Saylor’s Strategy (MSTR) stock are up a bit on Wednesday amid a BTC rally back to $90,000. Bitcoin has recently gone through a chaotic phase in its cycle. This phase was characterized by a sharp decline, triggered by several macro developments such as Fed volatility and trade tariffs. But BTC is now showing signs of rejuvenation and appears to be recovering, which could help reignite the fire under MSTR stock. At press time, shares have fallen over 39% in the past month to $175.64.
Amid the price drop, Strategy is trying to reassure investors about its Bitcoin risk. The company said its Bitcoin holdings would cover convertible debt by nearly six times even if BTC fell to its average cost base of $74,000. With BTC back at $90,000, that scenario may not have to play out.
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The company currently has about 649,870 Bitcoin, worth roughly $56 billion at recent prices. Thanks to the recent MSTR decline, the company is now worth less than its BTC holdings. Despite that realization, Saylor insists the company will never sell its Bitcoin.
That could be a good thing, as analysts at Bitfinex said on Tuesday that early signs of renewed demand are emerging, although Bitcoin is still well below early November levels. Although November has historically been Bitcoin’s strongest month, both October and November have been unexpectedly weak this year. Bitfinex noted a recent uptick in Bitcoin option activity as a possible sign that demand is returning. Additionally, since November 11, the number of wallets with more than 100 BTC has increased by 0.47%, according to Santiment research. A surge in BTC whales could push the asset’s return to $100,000, perhaps by the end of the year.