Strategy's Bitcoin Holdings Drop 65% as BTC Price Declines

Strategy, the company formerly known as MicroStrategy, is currently navigating a challenging landscape as the price of Bitcoin has declined significantly, leading to a reduction in its unrealized profits. The company's ambitious plan to raise $21 billion through the issuance of preferred stock has sparked a mix of optimism and skepticism among market analysts.

As of early March 2025, Strategy's unrealized profit from its Bitcoin holdings dropped from approximately $20 billion to around $7 billion. This decline is attributed to Bitcoin's price fluctuations, particularly its retreat from a February peak of $109,000. Despite this setback, Michael Saylor, the company's CEO, remains steadfast in his vision for Strategy, using the preferred stock issuance as a means to acquire more Bitcoin. The firm's intention to raise $21 billion in capital through the issuance of STRK preferred stock underscores its aggressive approach to positioning itself in the crypto landscape.

Market reactions to Strategy's bold moves are divided. Some analysts, like Peter Schiff, express skepticism about the feasibility of such a capital raise given the current stagnant price action of Bitcoin. Schiff predicts that the company's share price could trade at a discount to its Bitcoin holdings. On the other hand, Jesse Myers, co-founder of OnRamp Bitcoin, sees the STRK issuance as a strategic method for raising capital efficiently, highlighting the potential for further growth in Bitcoin investment.

Despite the drop in unrealized profits, Strategy currently holds 499,096 BTC, amounting to approximately $40 billion at prevailing market rates. This substantial holding constitutes about 2.3% of Bitcoin’s total supply, providing a layer of financial resilience. However, the performance of MSTR share prices has mirrored market volatility, witnessing a significant drop of 56%. Analysts note that these fluctuations are common during Bitcoin bull runs and suggest that a standard pullback should not be viewed as a failure of Saylor’s overall strategy.

The broader implications for Bitcoin and corporate investment are significant. The performance of Bitcoin remains closely tied to broader economic indicators. As BTC recently dipped below $80,000, the outlook for recovery will depend significantly on forthcoming U.S. economic data and consumer sentiment. Investors are keenly watching to see whether Bitcoin will regain its lost ground, which in turn could affect the MSTR share price and Strategy’s overall investment