Strategy has told investors that Bitcoin would need to fall to roughly $8,000 before its crypto holdings no longer cover the company’s net debt, even as unrealized losses tied to recent price declines continue to deepen.
The disclosure was included in investor materials released alongside the company’s fourth-quarter results on February 5. Strategy, led by longtime Bitcoin advocate Michael Saylor, said such a scenario would represent an “extreme” market collapse, far below current price levels.
As of February 1, 2026, Strategy held 713,502 Bitcoin, acquired at a total cost of $54.26 billion, or an average price of $76,052 per BTC. At the time of the filing, the company valued its holdings at $59.7 billion, based on a reference price of $84,000, compared with net debt of approximately $6 billion.
With Bitcoin now trading near $63,800, the value of Strategy’s holdings has dropped to about $45.4 billion, according to Saylor Tracker data — roughly $10 billion below the company’s average purchase cost.
Debt coverage and balance sheet position
Strategy said its Bitcoin holdings would fail to cover net debt only if prices fell to around $8,000, a level last seen in early 2020. The company emphasized that its Bitcoin is unencumbered and not pledged as collateral, reducing the risk of forced liquidation during periods of market stress.
The firm also reported a 22.8% Bitcoin yield for fiscal year 2025, reflecting gains from capital raising and reinvestment strategies tied to its Bitcoin treasury model.
During 2025, Strategy raised $25.3 billion in capital, making it the largest U.S. equity issuer for the second consecutive year. It also completed five preferred stock offerings, raising $5.5 billion, and expanded its digital credit program, STRC, to $3.4 billion.
Company president and CEO Phong Le said the capital raised was used to advance Strategy’s Bitcoin-focused treasury strategy, adding that in 2026 the company plans to continue expanding STRC to drive growth in Bitcoin per share.
Chief financial officer Andrew Kang noted that Strategy’s capital structure is stronger than in prior market cycles, pointing to a $2.25 billion reserve fund that covers more than two years of dividend and interest payments.
Saylor described the balance sheet as a “digital fortress” built around Bitcoin holdings and digital credit infrastructure.
Losses, valuation, and market pressure
Despite management’s confidence, Bitcoin volatility continues to weigh heavily on results. Under fair value accounting rules, Strategy reported an operating loss of $17.4 billion for the fourth quarter of 2025, driven largely by unrealized losses on digital assets.
Common shareholders recorded a net loss of $12.6 billion, or $42.93 per diluted share.
At current prices, Strategy’s Bitcoin holdings remain well below their acquisition cost, widening the valuation gap that has emerged since late 2025 as selling pressure intensified across crypto markets.
The company’s diluted multiple to net asset value (mNAV) currently stands at about 0.85x, indicating that the stock is trading at a discount to the net value of its assets after accounting for debt.
Pressure is also mounting across the broader crypto treasury sector. According to data from Artemis, unrealized losses among firms pursuing Bitcoin accumulation strategies have now exceeded $25 billion, with none yet generating profits above acquisition costs.
While some analysts view Strategy’s $8,000 threshold as largely theoretical, others caution that a prolonged period of Bitcoin prices below $60,000 could strain investor confidence, raise refinancing costs, and limit the company’s ability to raise new capital on favorable terms.
