Strategy\u2019s Bitcoin holdings fell deep into paper-loss territory as BTC traded below the company\u2019s average purchase price, renewing scrutiny of Michael Saylor\u2019s Bitcoin treasury model.<\/p>\n
Strategy holds<\/a> 843,706 Bitcoin (BTC) acquired at an average price of $75,699 per coin, with a total cost basis of $63.8 billion. However, the latest Bitcoin downturn sank the value of Strategy\u2019s Bitcoin reserve to $52.6 billion, pushing its unrealized loss to $11.2 billion, according to the company\u2019s dashboard<\/a>.<\/p>\n Strategy\u2019s variable-rate perpetual preferred stock, STRC, has also declined<\/a> below its intended $100 value and is traded at $94.6 at the time of writing. Strategy’s (MSTR) stock price was down 1.5% in pre-market trading to $124.7 on Thursday, Yahoo Finance data<\/a> shows.<\/p>\n The paper loss adds to scrutiny of Strategy\u2019s Bitcoin treasury model as BTC trades below the company\u2019s average acquisition price, while the downturn in STRC price could complicate future preferred-stock issuance to fund its Bitcoin acquisitions. It comes days after Strategy announced the<\/a> sale of 32 BTC, its first sale since 2022.<\/p>\n Strategy dashboard with key metrics on its Bitcoin reserve. Source: <\/em>Strategy.com<\/em><\/a><\/p>\n Saylor pushed back on the bearish read Thursday, saying that mounting exchange-traded fund (ETF) outflows are \u201cpressuring BTC,\u201d and capital markets have poured $400 billion into AI infrastructure over the past six months.<\/p>\n \u201cThis is a capital rotation, not a Bitcoin impairment. Volatility creates opportunity,\u201d said Saylor in an X post<\/a>.<\/p>\n Source: <\/em>Michael Saylor<\/em><\/a><\/p>\n Bitcoin\u2019s price is down around 4.7% in the past 24 hours and 13.8% in the past week. The cryptocurrency traded at $63,157 at the time of writing, down over 20% in the past month, according<\/a> to TradingView. Spot Bitcoin ETFs<\/a> have logged $4.4 billion in outflows in the past 13 trading days, Cointelegraph reported earlier on Thursday.<\/p>\n BTC\/USD, 1-month chart. Source: Cointelegraph\/TradingView<\/em><\/p>\n Some market watchers said the STRC move was not unusual.<\/p>\n \u201cSTRC\u2019s $100 par value is not a price floor. It\u2019s the stated value used for liquidation preference and certain redemption provisions,\u201d wrote<\/a> popular investor and podcast host Scott Melker, adding:<\/p>\n \u201cA 5% discount to par is not evidence that something is broken. It\u2019s evidence that investors are demanding a higher yield, pricing risk, or reacting to market conditions \u2013 exactly what preferred stocks do.\u201d<\/p><\/blockquote>\n Others were less optimistic. Gold bug and long-time Bitcoin critic Peter Schiff said<\/a> that the lower the STRC price falls, the higher MSTR will be forced to increase dividend payments to \u201cbring the share price back up to $100,\u201d which means that \u201cMSTR will run out of cash much sooner, pulling forward Bitcoin sales to fund payments.\u201d<\/p>\n![\"\"](\"https:\/\/s3-images.ctmedia.io\/media\/content\/pasted-image-1328.png\")
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