Strategy’s Bitcoin holdings have fallen deep into paper-loss territory as Bitcoin traded below the company’s average purchase price, bringing renewed scrutiny to Michael Saylor’s Bitcoin treasury model.
Strategy holds 843,706 Bitcoin acquired at an average price of $75,699 per coin, with a total cost basis of $63.8 billion. The recent downturn sank the value of its reserve to $52.6 billion, pushing unrealized losses to $11.2 billion.
Strategy’s perpetual preferred stock, STRC, also dipped below its $100 par value to $94.60. Its common stock MSTR was down 1.5% in pre-market trading to $124.70. The paper loss adds scrutiny to Saylor’s model as Bitcoin remains below the company’s average buy price, and the STRC decline could complicate future stock issuances to fund acquisitions.
Saylor pushed back Thursday, citing $4.4 billion in ETF outflows pressuring Bitcoin and $400 billion flowing into AI infrastructure. “This is a capital rotation, not a Bitcoin impairment. Volatility creates opportunity,” he posted on X.
Bitcoin is down 4.7% in the past 24 hours and 13.8% in the past week, trading around $63,157. Spot Bitcoin ETFs have seen $4.4 billion in outflows over 13 days.
Investor Scott Melker noted STRC’s 5% discount to par is normal, reflecting higher yield demands. Bitcoin critic Peter Schiff warned MSTR may need to raise dividends, forcing earlier Bitcoin sales.
Standard Chartered’s Geoffrey Kendrick sees the bottom near, depending on Strategy’s next move. A purchase of 320 or 3,200 Bitcoin could signal stabilization, he said.