Michael Saylor’s Strategy Faces $12.4B Bitcoin Loss Amid Market Slump

• Strategy’s big Bitcoin bet turned painful as BTC fell below key levels, wiping out paper gains built since last year’s rally.

• With no new equity or debt raised, investors are questioning how long Strategy can keep buying Bitcoin in a tighter market.

• Ethereum-heavy BitMine faces similar losses but is staying patient, betting the downturn is a long-term buying chance.

Michael Saylor’s Strategy reported a staggering $12.4 billion net loss in Q4, driven by Bitcoin’s recent price slump below $60,000. The firm’s Bitcoin holdings, once valued above its cumulative cost, now trade below $76,052 per coin, erasing gains achieved since last year’s U.S. election rally.

The loss highlights the risks of Strategy’s aggressive pivot from enterprise software to a leveraged Bitcoin proxy. Analysts now question the sustainability of its model amid cooling investor appetite and tightening capital access.

Strategy transformed itself over several years, using stock premiums to raise capital and buy more BTC. However, the company issued no new equity or debt alongside its earnings report, signaling limited funding options. “Investors are now focused on whether Strategy can still raise capital to fund additional Bitcoin purchases,” Benchmark analyst Mark Palmer told Bloomberg. Meanwhile, Saylor reassured stakeholders there are no margin calls and the firm holds $2.25 billion in cash, covering interest obligations for over two years.

Ethereum Losses Mirror Bitcoin Struggles

BitMine Immersion Technologies faces a similar challenge. The firm reported $8.2 billion in unrealized losses as Ethereum fell to $1,930, far below its $3,826 average purchase price. BitMine holds roughly 4.29 million ETH and has staked 2.9 million tokens, generating $188 million in annual yield.

The company also keeps $538 million in cash and no debt, positioning itself to capitalize on the downturn. Despite losses, BitMine views the market as a buying opportunity, mirroring Strategy’s long-term Bitcoin approach.

Saylor Launches Bitcoin Security Program

Amid market pressures, Saylor announced the Bitcoin Security Program to address quantum computing and other emerging threats. He described quantum computing as a decade-away concern but emphasized its importance in developing global, quantum-resistant Bitcoin upgrades. Saylor reiterated that Strategy will continue buying Bitcoin each quarter and not sell, citing support from crypto-friendly leadership in the current administration.