MicroStrategy trading at 18-month low following crypto and stock market drop

MicroStrategy was trading at 18-month lows on Tuesday as cryptocurrency prices continue to fall in tandem with broader financial markets.

Shares in Michael Saylor's software company were trading at $188.50 at the time of writing, according to Nasdaq data via TradingView.

This represents a drop of more than 55% over the past month, down from $427.05 on April 25.

MicroStrategy’s massive bet on bitcoin – it and its entities currently hold 129,218 bitcoins –  is now in the red having fallen below the average purchase price of $30,700.

Bitcoin (BTC) was trading at $28,746 dollars, at the time of writing, having fallen below $30,000 on May 12 following the collapse of Terra's stablecoins TerraUSD (UST). This spread across the crypto market putting downward pressure on all digital assets.

The last time MicroStrategy was trading at these levels was on November 9, 2020, when it was trading at $183. At that time bitcoin (BTC) was trading at $16,410.

However, the software company’s bet on bitcoin is only one mitigating factor for the drop in share price.

Broader financial markets have been rattled by a tough macroeconomic landscape as governments and central banks address rapidly growing inflation flowing the pandemic.

For instance, the US Federal Reserve has promised to begin reducing its $9 trillion balance sheet from next month, as it aims to stem rising inflation.

This has left most major US stock indexes down year-to-date. The S&P 500 lost 18.91%, the Nasdaq Composite is down 29.50% and the Dow Jones slipped 13.99% since January.