The chart for MSTR (MicroStrategy) displays significant volatility and seasonal trends from 2015 to 2024. The stock tends to show strong positive performance in January, with notable gains in 2020, 2021, and 2023, aligning with the broader market optimism at the start of the year. However, February and March have been less consistent, with MSTR seeing significant declines in those months during 2018, 2022, and 2023. April and May also display mixed returns, with notable performance spikes in 2019 and 2020, although May often struggles. The summer months of June and July have historically been volatile, with substantial drawdowns in 2022 and 2023, especially during crypto winter, a period of declining cryptocurrency values. August continues this trend of volatility, while September remains a weak month, consistently underperforming.
One of the key factors affecting MSTR is its direct exposure to Bitcoin, as the company holds substantial Bitcoin reserves. This connection makes MSTR highly sensitive to cryptocurrency market fluctuations, contributing to its increased volatility, particularly during crypto downturns. Notably, MSTR’s performance has been volatile during periods of crypto market stress, such as in 2022 and 2023.
The inclusion of MSTR into QQQ (Nasdaq-100 ETF) further magnifies this risk, as the ETF’s performance is now somewhat tied to MSTR’s volatility. When MSTR’s Bitcoin holdings underperform or experience a significant decline, it can drag down the performance of QQQ, which could introduce more volatility into the tech-heavy ETF. This could lead to discrepancies in returns between QQQ and SPY, especially in periods when cryptocurrency struggles. The market’s growing dependence on MSTR’s performance could make QQQ more sensitive to crypto market cycles, exacerbating its volatility compared to other more diversified ETFs like SPY.