“#Bitcoin is money that won’t fail you stored in a bank that can’t rob you.” — Michael Saylor
This is one of the messages that the crypto billionaire and evangelist posted on Twitter on Sept. 18, even as fresh turmoil rocked the cryptocurrency market.
The tremors continue as investors fear that a sharp hike in interest rates to fight inflation from the Federal Reserve will cause a hard landing — a recession — for the economy. The central bank holds its monetary-policy meeting Sept. 20-21.
The cryptocurrency market is down 4.1% to $968 billion at last check, according to data firm CoinGecko. It is thus again below the psychological threshold of $1 trillion, which itself is two-thirds down from the record $3 trillion it reached last November.
Apart from stablecoins, which are designed to be spared from volatility, almost all cryptocurrencies are in the red. Bitcoin, the leading cryptocurrency by market value, was down more than 4% at $19,158.98. Earlier, BTC fell below $19,000.
Ether, the native token of the ethereum platform, fell more than 7% to $1,339.52. ETH has not yet benefited from the publicity stemming from the platform’s Sept. 15 software update, which will drastically reduce the energy consumption tied to that crypto.
New Impairment Charges
Coins attached to promising decentralized finance platforms were being crushed by investors. Solana was down 5%, Cardano gave back 7% and Polkadot was off 7.3%.
The meme coins dogecoin and Shiba Inu fell 5.3% and 7% respectively.
The latest price drops, which are driven mainly by macroeconomic worries, are also affecting companies and investors who have bet on cryptocurrencies.
The software company MicroStrategy (MSTR) , co-founded by Saylor, is particularly in focus. The billionaire recently stepped down as chief executive and remains executive chairman.
After eight very difficult months, MicroStrategy share prices rebounded a little in early September. But this small burst is weakening. Indeed, MicroStrategy shares are down 12% to $202.99 since Aug. 31.
MicroStrategy shares have lost 63% of their value in some nine months. For the firm, this collapse normally prompts impairment charges.
The company said it took bitcoin-related asset-impairment charges of $2 billion in the second quarter. MicroStrategy recorded a net loss of $1.06 billion for the period.
MicroStrategy is the only big name on Wall Street to hold tens of thousands of bitcoins on its balance sheet. As of Sept. 8 the software company’s portfolio included 129,699 bitcoins purchased for a total $3.98 billion, according to regulatory filings.
Based on the fall in bitcoin’s price, the math indicates that the losses at last check amount to almost $1.4 billion. MicroStrategy bought its bitcoins at an average of $30,664 each.
‘Keep the Faith!’
Coinbase (COIN) and Galaxy Digital Holdings (BRPHF) , the company of former banker and billionaire Mike Novogratz, have also been hit by falling cryptocurrency prices.
Coinbase shares are shedding most of the gains they posted since Aug. 31. On Sept. 12 Coinbase was trading at $82.55 a share, a multimonth high. But the platform has now fallen back to around $71. In one week, Coinbase shares lost almost 14% of their value. Since January, the fall is 72%.
As for Galaxy Digital, which has invested in various crypto projects and in bitcoin, the damage has been less significant since September as the shares have lost 2.3% since Aug. 31. But since January, the fall is 63%.
The evangelist Novogratz remains undaunted. The former Goldman Sachs banker recently humorously encouraged Anthony Pompliano, another crypto evangelist, not to lose faith.
“Cmon @APompliano, keep the faith !!😂”