Strategy Inc., the largest corporate holder of Bitcoin (BTC), is grappling with approximately $3.8 billion in unrealized losses following a significant downturn in the cryptocurrency market, which has seen Bitcoin prices drop below $71,000.
The recent decline in Bitcoin has drastically altered Strategy”s financial landscape. According to data from TradingView, the cryptocurrency has returned to values reminiscent of the 2024 U.S. election period, reflecting a 19% decrease in 2026 alone amidst an overall market downturn.
Currently, Strategy Inc. possesses 713,502 Bitcoins, which were acquired at an average price of $76,052 each, leading to an initial investment of around $54.3 billion. However, with Bitcoin trading recently near $70,827, the value of these holdings has decreased to approximately $50.53 billion, resulting in losses exceeding $3.7 billion. Just four months prior, Strategy enjoyed peak paper gains of nearly $33 billion, highlighting the extreme volatility characteristic of the crypto market.
As Bitcoin”s value continues its downward trajectory, the pressure on Strategy”s stock has become evident. Shares of MSTR fell by 3% on Wednesday, closing at $129, and continued to decline in after-hours trading. Currently, the stock is over 70% lower than its peak in July 2025 and shows an 18% drop year to date.
Despite these challenges, the leadership at Strategy Inc. appears resolute in its long-term commitment to Bitcoin. Executive Chairman Michael Saylor has consistently defended the company”s strategy, emphasizing that Bitcoin should be viewed as a long-term investment rather than a short-term trade. He has publicly reiterated his belief that volatility is a natural aspect of Bitcoin, rather than a reason to divest.
As Strategy approaches its fourth-quarter earnings report, scrutiny is mounting regarding the debt incurred to finance its Bitcoin acquisitions. Saylor remains firm, suggesting that temporary price fluctuations do not diminish the company”s long-term outlook.
Market analysts are voicing concerns about the broader implications of the declining Bitcoin prices. Notably, renowned investor Michael Burry cautions that a prolonged downturn could lead to significant financial stress across the marketplace. He has pointed out that persistent trading below $70,000 may trigger considerable losses for major institutional investors, with Strategy being particularly vulnerable.
Burry has highlighted potential scenarios where Strategy”s losses could exceed $4 billion, which may impact its access to capital markets. He also warns that other institutions could suffer losses ranging from 15% to 20% on their Bitcoin holdings, a situation that could necessitate stricter risk management protocols within the financial system.
Furthermore, if Bitcoin were to decline further towards $60,000, it could pose an existential threat to Strategy, given the extent of its exposure.
