Key Highlights
- Strategy faces over $7 billion in unrealized Bitcoin losses after BTC dropped below $70,000.
- Despite the losses, Strategy is not selling its Bitcoin, with traders giving only a 27% chance of any sale this year.
- Bitcoin’s price drop is pulling MSTR down, showing how closely the company’s stock moves with Bitcoin.
Michael Saylor’s Strategy is facing an unrealized loss of more than $7.05 billion on its Bitcoin (BTC) holdings after the cryptocurrency dropped below $70,000, a level last seen in November 2024.
Bitcoin dropped 8% today from an intraday high of $73,000 to now trading for $66,108, an 8.61% drop in 24 hours, according to CoinMarketCap. The price action indicates that BTC could drop even more, which further puts Strategy in a tough spot, but the company doesn’t seem to have plans to sell its Bitcoin holdings anytime soon.
Strategy’s $54 billion BTC holdings under pressure
According to DropsTab, Strategy owns 713,502 Bitcoins, purchased at an average price of $76,052 per coin, totaling about $54.3 billion. When Bitcoin hit its all-time high of $126,000 in October, the holdings were worth over $80 billion.
Now, the sudden drop has placed the company in a position where losses exceed $7.05 billion. However, traders are betting the company will not sell. According to Polymarket, there is only a 27% chance that Strategy will liquidate any Bitcoin by the end of the year.
Traders on the platform have bet on a 25% chance that the firm sells any of its holdings by the end of the year, an 11% chance by June 30, and a 5% chance by the end of March. The end of March bet has the highest volume, with about $1.2 million in volume.
Peter Schiff, a well-known Bitcoin critic, warned on X that the losses could grow further. “MSTR’s losses are just beginning to mount,” he said, noting that shareholders are starting to sell their shares.
MSTR stock falls 15% in 24 hours
The recent drop has also affected Strategy’s MSTR stock, trading around $109 in premarket today, down from $129 yesterday, a 15% drop in 24 hours. This adds up to a 26% year to data loss. The stock has been nosediving for the past 2 weeks, printing strong sell candles in its way.
Currently, the stock is trading at a level that has not been seen since September 2024, which also serves as a support level for the stock. This is after it peaked above $450 last year. However, the market cap now sits at $31.62 million in volume, with daily volume reaching about $32.42 million.
Strategy says it’s not selling
Despite the declines, Strategy is showing no signs of panic. Michael Saylor reaffirmed his commitment on X, stating, “Buy Bitcoin, Don’t sell the Bitcoin.”
Last year, the company set up a cash reserve to cover all debts and dividend payments. CEO Phong Le, in an interview with CNBC, explained that this reserve could pay for about two years of debt and interest, giving the company a safety net. Crypto commentator Atlas added that in the last Bitcoin cycle, when Strategy bought coins for about $30,000, and Bitcoin dropped to $16,000, the company did not sell any coins and did not face bankruptcy.
The company is expected to provide updates during its Q4 earnings call today, likely discussing its ongoing Bitcoin accumulation strategy amid the market downturn.
Broader implications
Bitcoin’s price matters not just for the cryptocurrency itself, but also for companies like Strategy that hold large amounts of it.
The close connection means that any change in Bitcoin sentiment directly affects Strategy’s stock performance. As a result, the recent Bitcoin crash has created a chain reaction: lower crypto prices lead to lower MSTR stock prices, and investor confidence is shaken.
Also Read: Bitcoin Drops Below $70K as ETH Tests $2K Support, XRP Slides 13%
