Shares of Strategy, the software company turned Bitcoin, previously hit an all-time high of $474 in mid-November.
Strategy executive chairman Michael Saylor has helped the company acquire nearly 500,000 Bitcoins—worth more than $40 billion—since 2020 by borrowing money and selling shares in the company. Strategy announced a plan in October to raise an additional $42 billion by 2027 to continue amassing Bitcoin.
“Strategy’s price action is really just a function of the company being a levered play on Bitcoin,” Mark Palmer, a research analyst at investment banking firm The Benchmark Company, told Fortune.
Bitcoin has fallen over 25% from its all-time high of $109,000 in January as growing concerns over slowing economic growth put pressure on risky assets like crypto. Investors are dumping Bitcoin and Bitcoin-related stock as Trump announces aggressive tariffs on Canada, Mexico and China. Despite his decision to delay and roll back some levies for some countries, the constant back and forth is fueling uncertainty as investors anticipate the tariffs will make inflation worse by increasing the price of foreign goods. Trump also declined to rule out a potential recession this year in a recent interview with Fox News , saying that the country is in a “period of transition,” only exacerbating investor worries.
But broad macroeconomic pressures are not the only factors contributing to Strategy’s downturn. While the company’s stock often moves in tandem with Bitcoin, it grew more quickly than its underlying cryptocurrency holdings following Trump’s election. That was due in part to anticipation that the president would order large government purchases of Bitcoin to be held in a national crypto reserve. However, last week Trump signed an executive order declaring that the reserve will only include crypto that had previously seized from illegal activities, nixing any plans to buy more.
“Bitcoin is in an air pocket as it pertains to institutional adoption and a challenging risk off environment is adding to the downward pressure,” Palmer said.