MicroStrategy's Massive Bitcoin Bet Briefly Turns Red as It Continues $56 Billion Accumulation
MicroStrategy, the publicly-traded company that has become synonymous with corporate Bitcoin adoption, saw its monumental bet on the cryptocurrency briefly dip into unrealized losses this weekend. For the first time in years, Bitcoin's price fell below the firm's average purchase price, estimated around $76,000 per coin, casting a temporary shadow over its $56 billion hoard.
The digital asset touched a low of $74,591 on Sunday, its weakest level since the pro-crypto political shift in the U.S. over a year ago. While Bitcoin recovered to $78,579 by Monday, restoring the paper profit on MicroStrategy's position, the event highlighted the volatility risks inherent in the company's core strategy. The firm's stock (MSTR) has suffered disproportionately, down nearly 2% in early Monday trading and having plummeted 60% over six months—double the decline of Bitcoin itself.
In a press release, MicroStrategy confirmed it added approximately 900 more Bitcoin to its stash last week at an average cost of $88,000 each, funded through common stock issuance. This latest purchase, however, represents its smallest weekly acquisition since December, even as the company recently secured authorization to raise more capital through its "STR" preferred share product. Executive Chairman Michael Saylor announced a 25-basis-point hike in the dividend rate for these shares, increasing the future cost of capital for Bitcoin purchases.
The company's aggressive accumulation began in 2020. The last time its holdings were underwater was in October 2023, when its $5.3 billion position was bought at an average of just over $30,000 per Bitcoin. To fund its nearly $50 billion spending spree since then, MicroStrategy has leveraged convertible debt, common stock, and dividend-paying preferred shares.
Market Watch & Unrelated Controversy
On prediction market Myriad, traders on Monday assigned a 31% probability that MicroStrategy will sell some Bitcoin this year, up from 22% the prior week. Separately, newly unsealed court documents from the Jeffrey Epstein case contained a 2010 email in which publicist Peggy Siegal described a dinner encounter with Saylor, calling him "a complete creep" with "no personality." MicroStrategy and Siegal did not immediately respond to requests for comment on the email, which is unrelated to the company's financial operations.
Analyst & Investor Reactions
"This is a stark reminder that corporate treasury strategy is not immune to market cycles," said David Chen, a fintech analyst at Horizon Insights. "While the long-term thesis may hold, the stock's severe underperformance versus Bitcoin itself raises valid questions about execution risk and cost of capital."
"Saylor is playing with shareholder money like it's a personal crypto fund," fired Anya Petrova, a portfolio manager at a competing asset firm. "The stock is down 60% while Bitcoin is down 30%. That math isn't complicated. This isn't innovation; it's a leveraged punt that's blowing up, and the recent preferred share rate hike shows the funding model is getting stressed."
"The momentary paper loss is a non-event for long-term believers," countered Marcus Wright, a retail investor and vocal proponent. "They've been through cycles before and held. The consistent buying, even at higher prices, shows incredible conviction. The stock weakness is a buying opportunity."
"The Epstein email sidebar is a distraction," noted Dr. Lisa Reynolds, a corporate governance professor. "The real focus should be on the sustainability of using complex, dilutive capital instruments to fund a single-asset strategy, especially as funding costs rise."