A sharp bitcoin slump has battered companies holding digital assets, with MicroStrategy among those facing steep losses. The decline follows concerns over U.S. monetary policy and waning optimism around crypto-friendly regulations, wiping out post-election gains.

Firms banking on cryptocurrency appreciation now grapple with falling asset values and investor skepticism. MicroStrategy, which shifted its business model to focus on bitcoin holdings, cut its earnings forecast dramatically, signaling trouble for balance sheet-heavy strategies.

Market watchers warn the crypto downturn may persist, disrupting funding plans for firms reliant on stock performance to acquire more tokens. Analysts predict prolonged volatility, challenging the viability of treasury-based crypto investment models.