TLDR
- Strategy stock dropped 7.7% in premarket after Bitcoin fell to 10-month low of $74,553
- Company’s 713,502 Bitcoin holdings worth $53.1 billion at lowest point, below $54.26 billion purchase price
- Strategy added 855 Bitcoin for $75.3 million at $87,974 each before weekend crash
- Bitcoin recovered to $77,868, bringing Strategy’s position back to approximately $55.6 billion
- Stock hit multi-year low of $138.80 as market multiple of net asset value stands at 1.15
Strategy shares tumbled in premarket trading following Bitcoin’s weekend collapse. The stock fell 7.7% while the broader Nasdaq declined just 0.7%.
Bitcoin dropped to $74,553 on Sunday. That marks the cryptocurrency’s lowest price since April 2024.
More importantly, Bitcoin fell below Strategy’s average purchase price. The company paid $76,037 per token across all its acquisitions.
Strategy owns 713,502 Bitcoin purchased for $54.26 billion. At Bitcoin’s weekend low, those holdings were worth only $53.1 billion.
The company’s entire Bitcoin position was in the red. This is the first time Strategy has been underwater on its cryptocurrency bet.
Bitcoin has since rallied back above $77,000. The recovery pushed Strategy’s holdings to around $55.6 billion in value.
Strategy Continues Buying Through Volatility
The company disclosed Monday it purchased 855 more Bitcoin last week. Strategy spent $75.3 million at an average price of $87,974 per token.
The timing was unfortunate. Strategy bought right before Bitcoin’s sharp decline over the weekend.
This purchase was smaller than typical. Strategy has been buying hundreds of millions or even billions in Bitcoin weekly throughout recent months.
The company funded the buy through common stock sales. Executive Chairman Michael Saylor posted on X about the purchase over the weekend.
Saylor shared a chart of Strategy’s Bitcoin holdings with the caption “More orange.” He’s led the company’s Bitcoin accumulation strategy since 2020.
Premium Narrows as Price Pressure Mounts
Strategy’s market multiple of net asset value is currently 1.15. This metric shows Strategy trades at a 15% premium to its Bitcoin holdings value.
Short-seller Jim Chanos exited his Strategy position in November. He predicted the company would eventually trade at 1.0x mNAV with no premium.
Strategy shares fell to $138.80 in premarket trading. That’s a multi-year low representing a 7.3% drop.
The stock has faced growing pressure as Bitcoin volatility increases. Critics have long questioned Strategy’s Bitcoin-heavy business model.
Breakeven Point Becomes Critical Level
Strategy’s $76,052 average purchase price is now a key level. Bitcoin trading below this price puts the company’s entire position at a loss.
The cryptocurrency currently trades around $77,868 according to CoinDesk. That’s about 2.4% above Strategy’s breakeven point.
Strategy has accumulated Bitcoin over approximately 5.5 years. The company formerly known as Microstrategy has made cryptocurrency its primary treasury asset.
Last week’s purchase at $87,974 per Bitcoin is well above current market prices. That acquisition alone is down roughly 12% in value.
Bitcoin’s recovery from weekend lows has provided temporary relief. However, the cryptocurrency remains down from recent highs and trading in a volatile range.
