The world’s largest institutional holder of Bitcoin, Strategy, is facing mounting pressure. A recent downturn in the cryptocurrency’s price, which has fallen below the $75,000 mark, has dramatically eroded the unrealized gains on its massive Bitcoin treasury. These paper profits have now shrunk to less than 3%, bringing the company perilously close to the average price it paid for its holdings.
Unrealized Losses Loom on the Balance Sheet
Analysis from the blockchain intelligence firm Lookonchain indicates a precarious situation. With 712,647 Bitcoin in its possession, Strategy is now facing the threat of an unrealized loss exceeding $900 million. The company’s average purchase price sits at approximately $76,037 per coin. With Bitcoin currently trading near $78,000, there is very little room for further depreciation before those paper losses become realized.
This exposure comes despite the firm’s continued aggressive accumulation strategy during recent market volatility. Records show that between January 20 and January 26, 2026, Strategy purchased an additional 2,932 Bitcoin for $264 million. These coins were acquired at an average price of $90,061, meaning these specific investments are now significantly “underwater.”
Dividend Hike Aims to Shore Up Capital
In a move to sustain its financing capacity, Strategy has increased the dividend on its STRC Series A Perpetual Stretch Preferred Stock. The dividend was raised by 25 basis points to 11.25% for February 2026. These preferred shares, which were launched in July 2025 with a $2.5 billion issuance, serve as the primary funding instrument for the company’s Bitcoin acquisitions.
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The firm has also been actively raising capital through equity sales. In just a six-day span from January 20 to January 25, 2026, it generated $257 million from the sale of 1.6 million common shares. A further $7 million was raised through the sale of STRC shares.
Fourth-Quarter Earnings Report Carries High Stakes
All eyes are on Strategy’s upcoming financial results, scheduled for release on Thursday, February 5, 2026. The figures for the fourth quarter of 2025 are anticipated to be highly sensitive. Since 2025, the company has been required to report its Bitcoin holdings at fair market value each quarter. This accounting rule means the cryptocurrency’s extreme price swings have a direct and immediate impact on the company’s reported earnings.
The volatility has already taken a heavy toll. In Q4 2025 alone, Strategy recorded a staggering $17.44 billion in unrealized losses on its digital asset portfolio. This financial strain is reflected in its share price, which has plummeted approximately 61% over the past six months, recently trading at just under $149.71.
The upcoming quarterly statement will provide critical insight into the damage inflicted by the recent Bitcoin purchases on the bottom line. Furthermore, it will shed light on management’s plans for future capital allocation in this challenging environment.
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