- Strategy‘s massive Bitcoin holdings, purchased at a lifetime average of $76,052, are now worth less than their total cost for the first time in over two years.
- Despite the paper loss, the company’s $56 billion BTC treasury remains substantial compared to its $8 billion in debt, with no immediate liquidation threat.
- Strategy‘s market value is largely tied to its bitcoin, as its core software business generated under $500 million in revenue over the last year.
- Social media reaction highlighted investor anxiety, with one user noting they’ve been “buying BTC for 5+ years with nearly zero profit.”
Overnight, bitcoin fell below $74,600, dipping under the average purchase price of Michael Saylor’s corporate treasury for the first time since October 2023. Since 2010, Strategy has acquired 713,502 BTC at a lifetime average cost of $76,052, an investment now valued at less than $53.3 billion. However, this milestone does not threaten the company’s solvency, as its BTC holdings are worth $56 billion against only $8 billion in debt. Consequently, Strategy faces no automatic liquidation and its debt doesn’t mature until 2028 at the earliest.
Market observers took to social media, where millions saw the decline. “Been buying BTC for 5+ years with nearly zero profit. Down even worse when adjusted for inflation,” one user reacted. Meanwhile, investors primarily value Strategy based on its bitcoin treasury, not its legacy software operations. The company’s trailing 12-month revenue from business activities was less than $500 million.
The firm’s main financial obligations are servicing operational costs and bondholder coupon payments. Its annualized dividend and interest expenses were $689 million as of last October. Furthermore, Saylor recently raised the dividend rate on a preferred share series by another 0.25%, increasing it to 11.25% from an initial 9%.
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