TLDR
- Strategy shares fell 7.7% in premarket as Bitcoin crashed below $75,000 during weekend trading
- Bitcoin temporarily dropped under Strategy’s $76,037 average buy price to $74,553, a 10-month low
- Strategy purchased 855 additional Bitcoin for $75.3 million last week before the price collapse
- Company owns 713,502 Bitcoin bought for $54.26 billion, currently valued around $55.6 billion
- Michael Saylor continues buying despite criticism as stock hits multi-year low of $138.80
Strategy stock got hammered in premarket trading after a brutal weekend for Bitcoin. Shares dropped 7.7% compared to just a 0.7% decline for the Nasdaq Composite.
Bitcoin crashed to $74,553 over the weekend. That’s a 10-month low and below Strategy’s average purchase price of $76,037 per token.
The company holds 713,502 Bitcoin purchased for $54.26 billion total. When Bitcoin hit its low, those holdings were worth just $53.1 billion.
Strategy’s bet was underwater for the first time. The company had always been in the black on its Bitcoin purchases until this weekend.
Bitcoin has recovered somewhat since then. The cryptocurrency now trades around $77,868, up 1.1% over 24 hours per CoinDesk data.
That bounce brings Strategy’s holdings back to approximately $55.6 billion. The company is slightly profitable again on its massive position.
Company Adds More Bitcoin Before Crash
Strategy filed paperwork Monday showing it bought 855 more Bitcoin last week. The purchase totaled $75.3 million at an average price of $87,974 per token.
This was a smaller buy than usual. Strategy has routinely purchased hundreds of millions or billions in Bitcoin weekly over recent months.
The company funded the acquisition by selling common stock. Executive Chairman Michael Saylor hinted at the purchase on X over the weekend.
Saylor posted a chart labeled “More orange” referencing Strategy’s growing Bitcoin stash. He’s been the cryptocurrency’s biggest corporate advocate since 2020.
Stock Hits Multi-Year Low
Strategy shares touched $138.80 in premarket trading. That’s a new multi-year low and represents a 7.3% decline.
The company’s market multiple of net asset value sits at 1.15. This means Strategy trades at a premium to its actual Bitcoin holdings value.
Short-seller Jim Chanos predicted in November that premium would disappear. He said Strategy would eventually trade at 1.0x mNAV with no premium at all.
Critics have questioned Strategy’s Bitcoin-focused business model for years. The recent price action has intensified that skepticism.
Bitcoin Volatility Continues
Bitcoin’s weekend crash marked its lowest level since April 2024. The cryptocurrency market remains highly volatile with sharp price swings.
Strategy bought its most recent Bitcoin at $87,974 per token. That’s well above current trading levels around $77,000.
The company formerly known as Microstrategy has made Bitcoin its primary treasury asset. It now owns over 713,000 tokens accumulated over approximately 5.5 years.
Strategy’s cost basis of $76,052 per Bitcoin means the company breaks even at current prices. Any further Bitcoin decline would push the position back into losses.
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