In a recent investor update, MicroStrategy, led by CEO Michael Saylor, indicated that Bitcoin would have to plummet to approximately $8,000 for the company”s cryptocurrency holdings to no longer suffice in covering its net debt. This revelation comes as the firm faces significant paper losses exceeding $10 billion amid fluctuating market conditions.
According to the materials shared on February 5, MicroStrategy”s Bitcoin holdings were valued at $59.7 billion, assuming a reference price of $84,000, which is substantially higher than its net debt of about $6 billion. However, with Bitcoin currently trading near $63,800, the worth of these holdings has decreased to roughly $45.4 billion, a significant drop from the average purchase price.
MicroStrategy described the scenario of Bitcoin dropping to $8,000 as an “extreme” situation, noting that such a price level has not been seen since early 2020. The firm emphasized that its Bitcoin assets are unencumbered and not pledged as collateral, thereby mitigating the risks of forced liquidation during market downturns.
As of February 1, 2026, MicroStrategy holds 713,502 BTC, which it acquired at a total cost of $54.26 billion, averaging $76,052 per coin. The company also reported a 22.8% yield on Bitcoin for the fiscal year 2025, attributed to various capital raising and reinvestment strategies.
During 2025, MicroStrategy raised an impressive $25.3 billion in capital, maintaining its position as the largest U.S. equity issuer for the second consecutive year. The company successfully executed five preferred stock offerings, generating $5.5 billion, and expanded its digital credit program, STRC, to $3.4 billion. “We raised $25.3 billion of capital in 2025 to advance our Bitcoin treasury strategy,” stated Phong Le, MicroStrategy”s president and CEO. “In 2026, we remain focused on expanding STRC to generate amplification and drive growth in Bitcoin Per Share.”
Chief Financial Officer Andrew Kang highlighted that the company”s financial foundation is more robust compared to previous cycles, with a $2.25 billion reserve fund available to cover over two years of dividend and interest payments. Saylor characterized the balance sheet as a “digital fortress” centered around its Bitcoin holdings and digital credit platform.
Despite this confidence, the firm is grappling with significant losses linked to the volatility of Bitcoin. For the fourth quarter of 2025, MicroStrategy reported an operating loss of $17.4 billion, with common shareholders facing a net loss of $12.6 billion, translating to $42.93 per diluted share. With Bitcoin trading in the low $60,000 range, the valuation of the company”s holdings is now considerably below their acquisition cost.
The current market conditions reveal that MicroStrategy”s diluted multiple to net asset value (mNAV) stands at about 0.85x, indicating that the stock is trading at a discount relative to the actual value of its assets, primarily its Bitcoin holdings. This situation reflects broader pressures within the crypto treasury sector, where data from Artemis shows unrealized losses among crypto accumulation firms exceeding $25 billion.
Analysts are divided on the implications of MicroStrategy”s $8,000 threshold, with some viewing it as a theoretical floor rather than a probable risk. However, prolonged trading below the $60,000 mark could potentially test investor confidence and lead to increased refinancing costs, thereby impacting the company”s ability to secure new capital under favorable conditions.
