Michael Saylor’s Bitcoin strategy has hit a rough patch, as the recent decline in Bitcoin’s price has turned his substantial holdings unprofitable. As Bitcoin dropped to $75,314 per coin, it fell below Strategy’s average acquisition cost of $76,037. This significant downturn has resulted in an unrealized loss exceeding $900 million for Strategy, which stands as the largest corporate holder of Bitcoin, boasting a total of 712,647 BTC, according to a report from Lookonchain.
Last week, Strategy made headlines by expanding its Bitcoin-related assets, purchasing an additional 2,932 BTC for approximately $264.1 million between January 20 and January 25. These transactions were executed at an average price of $90,061 per coin, inclusive of fees and expenses. Despite the downturn, Strategy appears unwavering in its commitment to accumulate more BTC.
On Monday, Bitcoin’s price dipped to a seven-week low, trading around $75,000 after falling below the $76,000 mark over the preceding weekend. Currently, Bitcoin is fluctuating around $75,871, reflecting a 3.96% drop over the last 24 hours. Given Bitcoin’s plummet and the red ink on Strategy’s holdings, the stock of MSTR remains notably sensitive to changes in Bitcoin’s price, having dropped about 61% over the past six months and currently hovering around $149.71.
While the unrealized losses from BTC holdings do not yet create balance sheet distress for Strategy, they certainly raise concerns about potential forced selling risks if the market continues to decline. Despite these challenges, Saylor remains optimistic, hinting at further purchases in a recent post, featuring his well-known message—increasing his “orange” assets. The crypto community has had mixed reactions, with many praising Saylor’s confidence in continuing to expand his Bitcoin portfolio without resorting to liquidating assets, a move that could dilute shareholder value.
The upcoming movements in Strategy’s strategy heavily depend on Bitcoin’s ability to stabilize at current levels. A further plunge could exacerbate pressure on both the company’s stock and its crypto holdings. Additionally, Bitcoin’s recent decline triggered a swift liquidation of long positions, wiping nearly $1 billion in value within minutes.
According to insights from the CoinSwitch Markets Desk, BTC is now looking to stabilize within the range of $75,000 to $77,000, where a majority of liquidations have already occurred. Should this support zone hold, the selling pressure may dissipate, allowing Bitcoin to gradually range or recover, with $80,000 positioned as the first notable resistance level. The current market landscape thus remains precarious, with observers keenly watching for signs of recovery or deeper declines.
