The shares of Strategy Inc. MSTR fell 6.1% during the pre-market trading session on Monday following a sharp decline in the price of Bitcoin BTC/USD

What Happened: Strategy Inc, a major Bitcoin holder witnessed a decline in its stock after the cryptocurrency’s price plummeted to $80,000 overnight, marking a 7% drop in the last 24 hours. This sharp fall is the most significant for the leading cryptocurrency since it fell below $80,000 ten days ago.

This recent drop came in because President Donald Trump did not rule out a recession and stated that markets could go through a period of ‘transition’.

Bitcoin’s decline impacted the broader market, causing other assets like Ethereum ETH/USD and Dogecoin DOGE/USD to slip into the red ahead of the new trading week. In the past 24 hours, the cryptocurrency market saw liquidations exceeding $615 million, with $540 million in bullish bets being wiped out.

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer at Maelstrom Fund cautioned, “Looks like BTC will retest $78,000. If it fails, $75,000 is next in the crosshairs.”

SEE ALSO: Trump’s ‘Chaotic’ Policies May Drive Investors To Europe, Says Analyst: ‘Quite A Shift In The World Order’

Why It Matters: The recent downturn in the cryptocurrency market comes amid a broader discussion about the role of digital assets in the economy.

Just two days before the plunge, the White House held its first crypto summit, which left some investors unhappy due to lack of clarity. This is likely because as per Trump’s executive order, the Strategic Bitcoin Reserve would consist solely of existing Bitcoin holdings that were previously confiscated by federal law enforcement agencies. The order did not provide a clear guarantee or timeline for the government to start making new cryptocurrency purchases directly.

The cryptocurrency industry is going through a major upheaval at the moment. The market’s reaction to Trump’s comments also highlights the influence of political and economic factors on cryptocurrency prices. Meanwhile, Strategy co-founder Michael Saylor proposed the U.S. government to acquire up to 25% of Bitcoin's total supply over the next decade, underscoring the growing importance of the cryptocurrency market.

• READ MORE: Peter Lynch’s Evergreen Market Advice: ‘If You Can’t Find Growth Companies In Innings Three Through Five, Look At Turnarounds’

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.