The mainstream financial media is subtly acknowledging that a lot of the price action in Bitcoin was fueled by leverage. We seem to be in the process of finding out how leveraged bets on a rising asset price work in reverse. Hint: they don’t work very well.
Bitcoin, which was soaring around $125,000 in October, dropped below $86,000. That’s down roughly 7% from a day earlier.
Strategy, the company that used to be known as MicroStrategy and now raises money just to buy bitcoin, lost 10.3%. It said that it raised a fund of $1.44 billion in U.S. dollars, not in bitcoin, by selling stock to help pay for its dividends on preferred shares and interest on its debt.
