The money copier finally broke… '30% plunge' opened the gates of hell

On the 1st (local time) Bitcoin plunged more than 6%

Investors shift to risk-hedging mood

"It could slide to $60,000"

The sell-off in the cryptocurrency market has intensified, accelerating the plunge in Bitcoin.

On the 1st (local time), Bitcoin plunged more than 6% in a single day, marking its worst daily drop since March. In New York trading that day, Bitcoin was trading at $85,468 as of 4 p.m., more than 30% below its record high of $126,000 set in early October. The decline spread to major coins such as Ethereum and Solana, and crypto-related stocks including Coinbase Global and Bitcoin-accumulating firm MicroStrategy, led by Michael Saylor, also fell.

The cryptocurrency sell-off is related to the market's recent risk-hedging mood. Investors have been continuously selling low-profitability technology companies, speculative paper companies, and meme stocks. Patrick Hossman, Chief Investment Officer (CIO) of BNB Plus, told the Wall Street Journal (WSJ) that "Bitcoin could be pushed down to $60,000" and that "the pain is not over yet."

The WSJ reported that "in past 'crypto winter' phases, major digital assets like Bitcoin typically only showed signs of rebound after plunging about 80% from their highs," adding that "previous cycles, including the harsh winter of 2022, were generally triggered as fraud and wrongdoing allegations spread across the market."

MicroStrategy said it raised $1.44 billion through common stock issuance to secure capacity for future dividend and debt interest payments. The funds are planned to be used for preferred stock dividend resources for 12~24 months. It also said it bought an additional 130 bitcoins in the past two weeks, increasing its total holdings to 650,000. That is roughly $56 billion at current value.

However, market attention that day focused on remarks Michael Saylor made in a video presentation. Saylor said that if the company's market capitalization falls below the net asset value of its bitcoin holdings (mNAV), it could sell some bitcoin and related securities for shareholders' benefit.

The comment followed remarks by MicroStrategy's Pung Re, CEO, on a podcast saying "selling bitcoin as a last resort is possible." CEO Re explained that if mNAV falls below 1 and other funding routes are blocked, they would have no choice but to sell bitcoin to secure dividend resources.

He said, "There are signs that a Bitcoin winter is approaching, and mNAV is under pressure. I hope mNAV does not fall below 1, but if it does and other capital-raising is impossible, we will sell bitcoin."

MicroStrategy's stock, which has already fallen nearly half this year, plunged as much as 12% intraday that day before narrowing losses to close. The closing price was $171.42, down more than 3%.

Ethereum plunged 7.6%, marking a 17% decline year-to-date. Solana fell about 8%. Coinbase Global dropped 4.8%, and stablecoin issuer Circle Internet Group also fell 5%.

New York—Correspondent Park Shin-young nyusos@hankyung.com