Bitcoin dropped roughly 15% in the first four days of February, pushing Strategy’s position into the red for the first time since Michael Saylor began accumulating the cryptocurrency in August 2020. The decline took the price below Strategy’s average cost basis of $76,037, putting the company about $630 million underwater on its holdings and wiping out roughly $47 billion in unrealized gains that had been built up just four months earlier. Despite Bitcoin still being up 550% since Strategy’s first purchase, the recent slide has drawn sharp criticism.
Schiff Says ‘Unwind Has Begun’
Peter Schiff, a longtime Bitcoin skeptic and gold advocate, piled on Strategy this week. He argued that the company’s aggressive buying helped fuel Bitcoin’s meteoric rise — and that the unwind has now started. “If Bitcoin ever bottoms, it won’t be until after Strategy sells its last satoshi,” Schiff wrote on X, suggesting the company’s reduced buying power is dragging prices lower. Schiff also highlighted a vulnerability in Strategy’s model: it relies on keeping Bitcoin prices high enough to issue stock above net asset value, raising capital to buy more Bitcoin. A prolonged dip below cost basis, he warned, could break that feedback loop.
Saylor Defends: 50 Million Already Exposed
Michael Saylor remained defiant. On social media, he repeated his Bitcoin mantra: “Buy Bitcoin. Don’t Sell the Bitcoin.” Speaking at the Bitcoin MENA conference in December, Saylor argued that Strategy is not a concentrated risk but a gateway for mass adoption. He noted that roughly 15 million beneficiaries now hold exposure to Bitcoin through Strategy securities via pension funds, insurance companies, sovereign wealth funds, and retail accounts — including 15% of Strategy shares held in Charles Schwab retail accounts alone.
Strategy claims to have already provided Bitcoin exposure to about 50 million people, with a target of reaching 100 million over time. Saylor also argued that the company’s actions added $1.8 trillion to Bitcoin’s market value, with the bulk of gains flowing to non-corporate holders. Addressing concerns that Strategy controls about 3% of Bitcoin’s total supply, Saylor dismissed the concentration risk, saying ownership is effectively distributed across millions of investors. Without corporate participation, he contended, Bitcoin would languish near $10,000 with a far smaller network. With it, he believes the path leads to trillion-dollar valuations. For now, Schiff is enjoying the downturn, but the real test for Strategy’s Bitcoin-first strategy lies ahead.