Michael Saylor’s Bitcoin Math Gets Uncomfortable as $76K Line Finally Breaks

Strategy shares slid Monday after Bitcoin dipped below the company’s average purchase price, cracking a level that had become a line in the sand for the market’s most aggressive corporate crypto bet.

Bitcoin fell to around $74,500 at its low (the weakest price since last April) slipping under Strategy’s average cost of $76,052 per coin, according to regulatory filings dated Feb. 2. That move sent shares of Strategy Inc. down as much as 8%, as investors took a harder look at a strategy built on nonstop Bitcoin buying.

It was the first time since 2023 that Bitcoin traded below the company’s cost basis, reopening a question many thought they wouldn’t have to revisit anytime soon... what happens if prices don’t bounce back quickly?

Strategy holds roughly $56 billion worth of Bitcoin, making it the largest corporate owner of the asset. On paper, that position only works as cleanly as it does when Bitcoin stays above the company’s average entry point.

The selloff came as risk appetite cooled across markets. Bitcoin has dropped about 11% over the past five days, pressured by renewed international friction and rising expectations that U.S. monetary policy could stay tighter for longer. Investors trimmed exposure to speculative assets as tensions flared between President Donald Trump and European leaders, and as uncertainty returned around global liquidity.

Concerns grew after Trump endorsed Kevin Warsh as his pick for Federal Reserve chair. Warsh is seen as more focused on fighting inflation than keeping markets flush with easy money… not exactly a comforting setup for assets built on leverage and confidence.

Once Bitcoin started sliding, forced selling made things worse. More than $2 billion in long and short positions tied to the asset have been liquidated since Thursday, according to Coinglass data, draining liquidity and speeding up the drop.

For Strategy, the move hits right at the heart of its playbook. Under Michael Saylor, the company turned itself into a leveraged Bitcoin proxy by selling shares when its stock traded above the value of its crypto holdings, then using that cash to buy even more Bitcoin. It worked extremely well when sentiment was strong.

That setup is now in hot water.

Strategy has spent about $54.2 billion buying Bitcoin. At Monday’s low, those holdings were worth closer to $53.2 billion, according to Bloomberg data. There’s no immediate danger (the company faces no margin calls and still has a $2.25 billion cash cushion) but its room to maneuver is getting smaller.

The company disclosed Monday that it bought another $75.3 million worth of Bitcoin between Jan. 26 and Feb. 1, showing it’s still leaning into the strategy. But that approach depends heavily on investor demand for its stock staying healthy.

That demand has faded. Strategy’s shares are down roughly 70% from their peak, wiping out the premium that once made issuing new stock an easy decision. Without that cushion, selling shares risks dilution without much upside.

Bitcoin’s story has also lost some momentum. It was once pitched as protection against inflation, government debt, and political chaos. Lately, it hasn’t responded much to those same themes. Instead, money has flowed toward faster-moving trades, from AI stocks to sharp swings in commodities like gold and silver.

By Monday, Strategy shares were down about 6.7% to $139.74, while Bitcoin bounced modestly to around $77,700. With the company’s market value now sitting close to the value of its Bitcoin holdings, even small price moves are having an outsized effect on how investors view the entire experiment.

At the time of publishing this article, Stocks.News holds positions in Strategy and Bitcoin as mentioned in the article.