Bitcoin briefly dropped to around $75,500, slipping just below Strategy’s average purchase price of roughly $76,037 per coin. That move pushed Michael Saylor’s company underwater on its bitcoin position on paper, but it did not, by itself, create an immediate balance-sheet problem.
The key detail is simple. Strategy holds 712,647 bitcoin, and all of it is unencumbered. None of those coins have been pledged as collateral, so a move below cost basis does not trigger forced sales.
Paper losses do not automatically create debt stress
Attention has also turned to the company’s $8.2 billion of convertible debt. The size is large, but the structure leaves room to maneuver. Strategy can roll over maturities or convert debt into shares when those obligations come due, and the first convertible note put date does not arrive until the third quarter of 2027.
The source also points to other tools that can be used to manage liabilities. It notes that other bitcoin treasury firms have recently used instruments such as perpetual preferred shares to retire convertible debt, and Strategy has similar options available if needed. On top of that, the company has $2.25 billion in cash on its balance sheet, reserved for dividend payments.
The pressure point is fundraising, not liquidation
Where the decline matters more is capital raising. Strategy has historically funded much of its bitcoin accumulation through at-the-market, or ATM, equity offerings. That approach works best when the stock trades at a premium to its net asset value, or mNAV, which compares a company’s market capitalization with the real-time market value of its bitcoin holdings.
According to the material, last Friday, when bitcoin was around $90,000 to $89,000, Strategy’s multiple was about 1.15x, meaning the shares were still trading at a premium to the value of its bitcoin stack. Over the weekend, with bitcoin sliding from about $85,000 into the mid-$70,000s, that premium flipped into a discount, or below 1. That makes fresh equity issuance less attractive.
Slower bitcoin accumulation may be the real effect
That is the practical takeaway in the source: trading below cost basis is not described as a crisis. It mainly slows Strategy’s ability to keep expanding its bitcoin holdings without diluting shareholders too aggressively. For comparison, in 2022, when MSTR traded below the value of its bitcoin holdings for most of the year, the company added only about 10,000 bitcoin.
The article’s conclusion is that Strategy is unlikely to fail because of this move alone. Even so, if bitcoin remains near these levels or falls further when markets reopen on Monday, MSTR shares could still react negatively.