Strategy Faces $11.2 Billion Bitcoin Paper Loss as Michael Saylor Remains Bullish

Strategy is facing renewed scrutiny after its massive Bitcoin holdings fell into deep unrealized losses following the latest cryptocurrency market decline. As Bitcoin dropped below the company’s average acquisition price, Strategy’s paper loss expanded to approximately $11.2 billion.

The company currently holds 843,706 Bitcoin purchased at an average price of $75,699 per coin. With a total cost basis of $63.8 billion, the value of those holdings has now fallen to around $52.6 billion as Bitcoin trades near $63,000.

The downturn has also affected Strategy’s financing vehicles. Its variable-rate perpetual preferred stock, STRC, has slipped below its intended $100 value and was trading around $94.60. Meanwhile, Strategy’s stock (MSTR) declined 1.5% in pre-market trading to approximately $124.70.

Saylor Says Market Is Experiencing Capital Rotation

Despite growing concerns, Executive Chairman Michael Saylor rejected bearish interpretations of the situation. He argued that large outflows from spot Bitcoin exchange-traded funds and heavy investment in artificial intelligence infrastructure have temporarily pressured Bitcoin prices.

According to Saylor, global capital markets have directed roughly $400 billion toward AI infrastructure over the last six months. He described the trend as a capital rotation rather than a sign of weakness in Bitcoin itself.

“Volatility creates opportunity,” Saylor said, maintaining his long-term confidence in the digital asset.

Analysts Split on STRC Weakness

Some investors remain unconcerned about STRC trading below par value. Market analyst Scott Melker noted that the preferred stock’s $100 par value is not a guaranteed price floor and that discounts often reflect changing market conditions and investor demand for higher yields.

However, long-time Bitcoin critic Peter Schiff offered a more pessimistic view. Schiff argued that if STRC continues to trade below its target value, Strategy may need to increase dividend payments to attract investors. He warned that such a move could place additional pressure on the company’s finances and potentially accelerate future Bitcoin sales.

The developments come shortly after Strategy disclosed the sale of 32 Bitcoin, its first Bitcoin sale since 2022, adding to investor focus on the company’s treasury strategy as market volatility continues.