Bitcoin’s Plunge and Strategy’s $4.5 Billion Loss: What’s Next?
Bitcoin, the most capitalized cryptocurrency, recently dipped below $70,000 for the first time in 16 months, triggering a broader market downturn. This decline has significantly impacted Strategy, the world’s largest corporate holder of Bitcoin, reporting a substantial loss.
Strategy’s Financial Strain
Strategy announced a $12.4 billion loss, or $42.93 per share, for the quarter ending December 31st. This contrasts sharply with the $670.8 million loss, or $3.03 per share, reported in the same quarter of 2024. The company’s stock has experienced a nearly 30% decrease in value since the start of the year.
The Shifting Tides for Bitcoin
Bitcoin had benefited from regulatory support following Donald Trump’s re-election and significant institutional inflows throughout much of 2025. However, since autumn, its value has nearly halved from its all-time high of $126,080 on October 6th. Bitcoin is currently trading around $64,702.
The current market correction is driven by a return of risk aversion, impacting the most volatile assets. Geopolitical tensions, macroeconomic uncertainties, and disappointing earnings forecasts are prompting investors to reassess valuations in the tech sector – and, in cryptocurrencies.
Factors Contributing to the Downturn
Uncertainties surrounding U.S. Regulations and large-scale selling by investors seeking cash are likewise contributing to the decline. Analysts at Deutsche Bank noted approximately $2 billion in outflows from spot Bitcoin ETFs in December and $7 billion in November. The appointment of Kevin Warsh as the potential next Federal Reserve chair has added to the pressure, as his policies could lead to a reduction in the Fed’s balance sheet, negatively affecting risk assets like cryptocurrencies.
Strategy’s Bitcoin Holdings and Average Cost
As of February 6, 2026, Strategy holds 713,502 BTC, acquired at an average price of $76,052 per Bitcoin. The company’s Bitcoin position was worth over $80 billion when Bitcoin reached its all-time high, but is now facing an unrealized loss of over $4.5 billion, reaching approximately $4.8 billion.
Michael Saylor Remains Optimistic
Despite the challenging environment, Michael Saylor expressed optimism during a recent earnings call. He emphasized favorable regulatory developments and his confidence in the increasing adoption of cryptocurrencies by businesses. He believes fundamental factors remain strong, with actions from major financial institutions and regulators signaling positive momentum.
Saylor stated, “The actions of the large financial institutions, the large banks, and the financial regulators are the fundamentals.” He also noted that price drops tend to “shake out the tourists and the skeptics.”
Is Strategy’s Model Sustainable?
Strategy’s business model, which involves raising capital through stock offerings to purchase Bitcoin, has faced scrutiny. Critics question its long-term sustainability, even labeling it a potential Ponzi scheme. However, Saylor’s defenders argue that these criticisms stem from a misunderstanding of the currency and the corporate finance techniques employed by Strategy.
Did you know?
Strategy’s initial Bitcoin purchase in August 2020 involved spending $250 million on BTC, marking a pivotal moment in corporate treasury strategies.
FAQ
Q: What is Strategy’s current unrealized loss on its Bitcoin holdings?
A: Over $4.5 billion, approximately $4.8 billion as of February 6, 2026.
Q: How many Bitcoins does Strategy currently hold?
A: 713,502 BTC.
Q: What is Michael Saylor’s outlook on Bitcoin?
A: He remains optimistic, citing favorable regulatory trends and increasing institutional adoption.
Pro Tip
Keep a close watch on regulatory developments and macroeconomic indicators, as these factors significantly influence Bitcoin’s price and the performance of companies like Strategy.
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