Executive Chairman Michael Saylor doubled down on Bitcoin (BTC) earlier this week, announcing via social media that his company Strategy (MSTR), formerly known as MicroStrategy, has purchased an additional 1,142 BTC for approximately $90 million at an average price of $78,815 per coin. The acquisition brings the company’s total Bitcoin holdings to 714,644 BTC, accumulated at a total cost of roughly $54.35 billion and an average price of $76,056 per Bitcoin. The move further cements Strategy as the largest and most aggressive corporate Bitcoin holder in public markets, but it also marks a notable turning point in the investment narrative.
https://x.com/saylor/status/2020846107685695931
With Bitcoin trading near $69,651, Strategy’s massive Bitcoin position is now underwater on a mark-to-market basis. At current prices, the company is sitting on an estimated $4.5 billion unrealized loss, a sharp reversal from the multi-billion-dollar paper gains that once defined Saylor’s Bitcoin strategy. After nearly six years of continuous accumulation, and with total holdings approaching the 1 million-Bitcoin mark, the scale of the bet is prompting renewed scrutiny from investors.
This shift matters because Strategy has evolved far beyond its legacy identity as an enterprise software company. For equity investors, the stock now functions primarily as a leveraged Bitcoin proxy. When Bitcoin trades above Strategy’s average cost, the market has historically rewarded the stock with a premium tied to upside optionality. When Bitcoin falls below that cost basis, however, sentiment changes quickly, and focus shifts to downside risk, balance-sheet durability, and capital structure stress. Being “in the red,” even on paper, alters the psychological framing for shareholders.
Saylor’s willingness to continue buying above the company’s average cost underscores the long-term nature of his thesis. Strategy is not attempting to time the market; it is methodically averaging into Bitcoin with the assumption that long-term appreciation will outweigh short-term volatility. Supporters argue that temporary drawdowns are irrelevant if Bitcoin eventually resumes its upward trajectory, potentially magnifying gains for Strategy relative to direct Bitcoin ownership.
Critics, however, see mounting risk. Strategy has historically relied on equity issuance, convertible debt, and preferred securities to finance its Bitcoin accumulation – all tools that can dilute shareholders or add leverage during market downturns. With Bitcoin now below the firm’s cost basis, questions are resurfacing about how long capital markets will continue to fund further accumulation on favorable terms, especially if Bitcoin prices remain weak or decline further.
The stock-market implications extend beyond Bitcoin’s spot price. Investors closely track Strategy’s market-cap-to-net-asset-value ratio, which measures how richly the stock trades relative to the value of its Bitcoin holdings. As that premium compresses, Strategy begins to trade less like a high-growth technology company and more like a balance-sheet-driven crypto vehicle, with valuation increasingly tethered to Bitcoin’s momentum rather than operating performance.
Saylor’s inclusion of both MSTR and ($STRC) in his X post announcing the latest crypto purchase also highlights the growing complexity of Strategy’s capital structure. With multiple tickers offering different forms of exposure, the company now sits at the intersection of equity, credit, and crypto markets, making its Bitcoin cost basis a critical reference point across all three.
Ultimately, Strategy’s latest purchase reframes the story from one of extraordinary gains to one of conviction under pressure. Being temporarily underwater does not invalidate Saylor’s long-term Bitcoin thesis, but it undeniably raises the stakes. For investors, the question is no longer just how high Bitcoin can go, it’s how much volatility, leverage, and red ink they are willing to tolerate along the way.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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