Strategy's Bitcoin Doctrine Tested by Price Decline and Institutional Ownership
Strategy is facing a challenging time in its Bitcoin investment strategy. The company's market capitalization stands at about $33.4 billion, and its Bitcoin holdings are a significant part of its balance sheet.
The value of Strategy's Bitcoin position has decreased due to the sharp price decline of Bitcoin. With the current price of around $64,667.49 on Binance, the company's 843,775 BTC holdings acquired at an average price near $75,476 each are now below their average acquisition cost.
Strategy has financed its further purchases through common stock and high-yield preferred share issuance. This structure gives investors Bitcoin-linked exposure through Strategy shares but also adds corporate financing and dilution risks that direct spot Bitcoin ownership avoids.
The company is considering selling some of its Bitcoin holdings to help fund dividends following a 23.8% price drop in the first quarter and a reported $12.5 billion loss.