MicroStrategy Faces $2.75B Bitcoin Loss Amid Volatile Market
As of February 5, 2026, Strategy Inc. (formerly known as MicroStrategy) is grappling with significant unrealized losses on its substantial Bitcoin holdings. The company’s stock, trading under the ticker $MSTR, has seen a notable decline, while Bitcoin prices have continued to fluctuate, exacerbating the situation for the firm.
Unrealized Losses Mount
Strategy Inc., a pioneer in corporate Bitcoin investment, has recorded paper losses of up to $2.75 billion, depending on Bitcoin’s fluctuating price. The company’s average purchase price for its approximately 713,502 BTC holdings stands at $76,052 per coin. With Bitcoin trading around $71,178, these losses highlight the risks involved in their aggressive accumulation strategy.
On February 4, Bitcoin’s price dipped to $72,500, pushing unrealized losses to about $1 billion. A Reddit-sourced summary indicated that losses might be even higher, reaching $2.75 billion as Bitcoin prices hovered around $72,200.
Stock Price Reaction
Strategy’s stock price has been impacted significantly by Bitcoin’s volatility. On February 4, the stock fell 8.6% to $121.80, coinciding with a 4.2% decline in Bitcoin’s value. This resulted in over $660 million in crypto liquidations, including $526.5 million in long positions, intensifying the impact on Strategy’s share price.
As of February 3, Strategy’s shares were down 4.5% to approximately $133, reflecting the market’s nervousness about the firm’s high exposure to Bitcoin. The stock is currently down about 77% from its all-time high, reflecting investor concerns about the company’s strategy and the volatility of its primary asset.
Continued Accumulation Strategy
Despite the mounting paper losses, Strategy remains committed to its Bitcoin accumulation strategy. The company recently acquired 855 BTC at an average cost of $87,974 per coin, funded through stock offerings. Michael Saylor, the company’s CEO, has reiterated his long-term commitment to holding Bitcoin, maintaining a bullish outlook despite current market headwinds.
Market Sentiment and Analyst Perspectives
Market sentiment towards Strategy is increasingly cautious, with many analysts rating the stock as a ‘sell’. The firm’s high sensitivity to Bitcoin price movements and the risk of equity dilution are significant concerns. Critics like Peter Schiff have warned of potential deeper losses, characterizing Strategy as a high-risk entity linked to possible Bitcoin price collapse. Inverse ETFs, such as MSDD, have gained value as investors seek to hedge against Strategy’s exposure.
Future Outlook
The outlook for Strategy remains uncertain. While the company continues to back its Bitcoin strategy, the market’s volatility and Bitcoin’s price trajectory will play crucial roles in determining future financial outcomes. Analysts and investors alike will be closely monitoring Strategy’s performance and strategic decisions in the coming months.
In conclusion, while the original tweet cited a $3.5 billion loss and $40 billion in losses over four months, today’s data and reporting do not support that magnitude. Current figures indicate paper losses of up to $2.75 billion, depending on exact BTC pricing at various points this week. Strategy’s position remains precarious but intact, with continued bullish conviction from leadership despite market headwinds.
Comments are closed.