Key Takeaways
- Strategy’s Bitcoin hedge is now nearing its average purchase price as BTC drops more than 30% from its all-time high.
- The firm may be forced to sell a portion of its Bitcoin reserves to meet financial obligations.
- Critics have long warned that Strategy’s debt-fueled Bitcoin accumulation strategy could backfire in a prolonged downturn.
Strategy (formerly MicroStrategy) is facing mounting pressure as its massive Bitcoin (BTC) reserve approaches breakeven.
With Bitcoin now down more than 30% from its all-time high, the firm’s average BTC acquisition cost of $67,549 is no longer a distant risk.
Strategy Faces Pressure as Unrealized Losses Near $4.6 Billion
The Fortune 500 company has amassed 275,965 BTC since November 2024 at an average price of $93,228. With Bitcoin trading around $77,471 at press time, that position reflects a staggering $4.6 billion in unrealized losses.
An 8-K filing submitted to the Securities and Exchange Commission (SEC) suggests Strategy may need to liquidate part of its Bitcoin holdings to meet financial obligations.
If it cannot secure fresh financing through equity or debt, a sale—potentially at a loss—might be unavoidable.
“If we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell Bitcoin to satisfy our financial obligations,” the filing reads. “We may be required to make such sales at prices below our cost basis or that are otherwise unfavorable.”
The disclosure struck a nerve within the crypto community because Strategy co-founder Michael Saylor’s unwavering mantra is “Never sell.”
Saylor has long positioned the firm’s Bitcoin treasury not just as a financial bet but as a philosophical stance against inflation and fiat currency devaluation.
In 2024, when critics raised concerns about the firm’s rising debt and vulnerability to Bitcoin volatility, Saylor dismissed the risk. “Bitcoin could go from $100,000 to $1,000,” he said at the time . “The debt is not going to get called; there is no recourse.”
But the latest filings suggest a different reality may be taking shape.
Confidence Wavers as “Never Sell” Narrative Gets Stress-Tested
At the time of writing, Bitcoin was just 13% above Strategy’s average cost basis. If the price dips below that level, it could trigger a cascading effect—potentially dragging down both the company’s balance sheet and its stock price.
The concern is not just financial. Strategy’s no-sell policy has been a symbolic pillar for institutional Bitcoin believers. A reversal could undermine confidence across corporate treasuries holding BTC and introduce volatility into an already fragile market.
Nathan Chiron, chief revenue officer at iExec, believes the psychological weight of a sell-off would be profound.
“Michael Saylor’s ‘never sell’ ethos has been a core part of the company’s narrative, acting both as a brand identity and a long-term strategic conviction,” Chiron said. “If Strategy begins to sell, it would not only mark a significant psychological shift for institutional Bitcoin holders but could also introduce near-term volatility and weaken confidence in corporate HODL strategies.”
Chiron emphasized that any such move wouldn’t necessarily reflect a loss of conviction but rather “pressure from non-believers forcing a fear-driven move.”
Mithil Thakore, co-founder and CEO of Velar, also commented, suggesting that volatility is an inherent part of Bitcoin’s journey.
“Volatility is the price of admission for asymmetric upside, and few assets demonstrate this more than Bitcoin. What we’re witnessing with Strategy’s current unrealized loss isn’t a flaw of the asset, but a natural chapter in its long-term monetization curve,” Thakore said.
Strategy’s Risky Playbook: Debt-Fueled Accumulation
Strategy began acquiring Bitcoin in 2020, ahead of the 2021 halving cycle.
Initially hailed as a visionary move, the strategy became controversial after the company began issuing convertible debt and stock to purchase more BTC—effectively leveraging its own balance sheet against a highly volatile asset.
Crypto critics and financial analysts alike have warned that the model could become unsustainable in a down market, with some even likening it to a Ponzi-like feedback loop.
The approach worked during bull markets when rising Bitcoin prices boosted investor confidence and allowed the firm to raise further capital.
However, as Bitcoin retraced from its highs, Strategy found itself increasingly exposed.
During the 2022–23 bear market, the company held firm despite stock price volatility and external pressure.
However, the stakes are higher now.
Strategy has expanded its BTC position significantly since then. If the asset continues to slide, even small downward moves could have outsize effects on both its treasury and public market valuation.
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