Strategy (formerly MicroStrategy) is facing a paper loss of over $11 billion on its Bitcoin holdings, as the cryptocurrency's price has declined. Michael Saylor, the company's co-founder and executive chairman, played down the slide and pointed to two key factors he believes are weighing on Bitcoin: outflows from Bitcoin exchange-traded funds (ETFs) and the massive global spending on artificial intelligence infrastructure.
Saylor emphasized that the loss is only on paper and that the company has not sold any of its Bitcoin. A paper loss represents the difference between an asset's market price and its purchase cost, only becoming a real loss if the asset is sold. Since August 2020, Strategy has been aggressively accumulating Bitcoin and remains one of the largest corporate holders of the cryptocurrency. Despite the substantial unrealized loss, Saylor has reiterated his long-term bullish stance, consistent with his past statements that the company has no intention of selling its Bitcoin holdings. Market observers note that as long as Strategy is not forced to liquidate, the paper losses will not materially impact its financial position.