Investors are increasingly questioning the true value of Strategy’s substantial $50 billion Bitcoin portfolio amid a dramatic shift in the cryptocurrency market. A year ago, Bitcoin’s price soared to an all-time high of $126,000, igniting a frenzy among investors eager to capitalize on what seemed to be an unstoppable rise. Companies dedicated to holding Bitcoin, like Strategy, emerged as significant players in this booming market, presenting themselves as secure bets on the future of cryptocurrency.
However, the landscape has changed. Bitcoin’s value has plummeted by 45% over the past four months, prompting investors to reassess their positions. With prices now below $70,000, many are left wondering if it’s wise to continue investing in Bitcoin treasury companies like Strategy.
Strategy’s core business model hinges on acquiring Bitcoin as affordably and swiftly as possible. Over the last five years, the company has built an impressive portfolio, holding 713,502 bitcoins worth approximately $50 billion at current market valuations. Its strategy includes regularly enhancing its Bitcoin reserves; for instance, just a week after a recent report highlighted its holdings, Strategy purchased an additional 1,142 bitcoins for $90 million, taking its total to 714,644 bitcoins, which equates to over 3% of all bitcoins in circulation.
Despite this impressive accumulation of assets, a troubling issue looms: Strategy’s Bitcoin holdings are now underwater. The company’s cost basis for its Bitcoin stands at $76,056 per bitcoin, a price significantly higher than the current market rate. This discrepancy was starkly illustrated in the company’s latest earnings report, which disclosed a staggering $12.4 billion loss for the fourth quarter of 2025 due to an impairment write-down on its Bitcoin assets.
As a result, Strategy’s stock has taken a severe hit, falling nearly 60% over the past year and recently hitting an 18-month low of $104. This decline poses a challenge for the company, particularly since its ability to purchase new bitcoins often depends on issuing more stock—a strategy that becomes less viable when the stock price is falling.
With the current market conditions, analysts find it hard to advocate for an investment in Strategy. Many suggest that acquiring Bitcoin directly may be a better option for investors, especially considering that Strategy’s market cap of approximately $40 billion is now less than the value of its Bitcoin holdings.
The overall situation for Bitcoin treasury companies appears dire, as numerous entities in this sector are experiencing similar challenges. The consensus among market observers is that holding onto stocks of these companies is unwise at the moment, with Strategy being labeled a sell for 2026 until substantial recovery in Bitcoin’s price occurs. As the cryptocurrency market remains volatile, investors must carefully weigh their options before making further commitments to companies like Strategy.
