Strategy's Bitcoin Bet Dips Underwater as Firm Adds to $56 Billion BTC Stash

In brief

• Strategy’s Bitcoin bet showed losses on paper for the first time in years.
• Its shares have fallen 62% over the past six months.
• The company recently raised more money than it spent on Bitcoin.

Strategy’s Bitcoin bet showed losses on paper for the first time in years, as the digital asset tumbled below the Bitcoin-buying firm’s average purchase price on Sunday. With Bitcoin recently changing hands at $78,579, Strategy’s $56 billion position had turned positive again on Monday. The company has amassed its stash for an average cost of around $76,000 per Bitcoin since 2020, according to a press release. Strategy’s shares recovered some losses when U.S. markets opened, but they remained down nearly 2% from Friday’s close at just under $147, according to Yahoo Finance. Over the past six months, the company’s stock price has plummeted 60%, outpacing Bitcoin’s 30% decline. 

Bitcoin fell as low as $74,591 on Sunday, its lowest level since President Donald Trump was re-elected on a pro-crypto platform in the U.S. 14 months ago. Strategy’s stock price surged as high as $543 in the following weeks, but it has fallen 74% since then. The last time Strategy’s Bitcoin holdings showed losses, they company held around $5.3 billion worth of the digital asset in October 2023. At the time, the company had purchased Bitcoin at an average price of $30,252 per Bitcoin. The company has spent $49 billion on Bitcoin then, by taking on convertible debt and issuing common stock and dividend-paying preferred shares. In the press release, Strategy signaled that it had purchased roughly 900 Bitcoin over the last week at an average cost of around $88,000 per Bitcoin. The increase in its holdings was funded though the issuance of common stock, without Strategy selling any preferred shares to investors. As Strategy sold its variable rate, or STRC, preferred shares to investors earlier this month, it notched back-to-back weeks where it bought over $1 billion worth of Bitcoin. However, the company’s latest acquisition marks its smallest buy since the beginning of December.

On Saturday, Strategy co-founder and Executive Chairman Michael Saylor said on X that the company was raising STRC’s dividend rate by 25 basis points to 11.25%. That means it will cost more for Strategy to raise money to buy Bitcoin with the product moving forward. Last year, Strategy established a so-called USD reserve to effectively prepay dividends, and its website says the cash stockpile can currently hold 30 months of payments. Strategy recently raised $31 million more than it spent on Bitcoin, leaving it with more cash on-hand. When STRC trades above $100, the company has said that it will issue more of the product to keep its price inline with the threshold. On Monday, the preferred share’s price jumped to $99.17, after falling as low as $97.95 last week, according to Yahoo Finance. On Myriad, a prediction market owned by Decrypt’s parent company Dastan, traders penciled in a 31% chance on Monday that Strategy will sell Bitcoin this year. That represented a notable increase from a 22% chance the week before. Epstein mention The Justice Department made 3 million pages of files on Jeffrey Epstein public last week, and Saylor was among those mentioned in an email sent by publicist Peggy Siegal to the late sex offender—two years after Epstein was convicted of sex crimes in 2008. Siegal recalled a gala dinner for a group of independent filmmakers that took place in 2010, where Saylor supposedly contributed $25,000 to pay for food “and the opportunity to get his name on [the] invite and meet a hip group.” She went on to describe Saylor as “a complete creep” with “no personality,” whose demeanor was comparable to a “zombie on a drug.” “We had smart directors sitting next to him and his idiot gorgeous date, and could not get any conversation out of him except, ‘I have a yacht I am taking to Cannes,’” she continued.

Siegal wrote that she was so put off by Saylor that she eventually “ran away from him,” arguing that the disconnect was too much to be able to “take his money and deliver a better life because he has no feel for social behavior.” Decrypt has reached out to Siegal and Strategy for comment.