Bitcoin Must Fall 90% For Years To Pressure Strategy's Debt, CEO Says

Strategy, the largest corporate holder of Bitcoin, warned that the cryptocurrency would need to fall 90% and remain at $8,000 for five to six years before it would threaten the company's ability to service its convertible debt according to CEO Phong Le. CEO Phong Le made the comments during a Q4 earnings call, where the firm reported a net loss of $12.6 billion due to unrealized losses on its Bitcoin holdings. Despite the steep losses, Le emphasized the company's balance sheet remains resilient unless Bitcoin falls below that threshold.

Bitcoin's price has fallen sharply in recent months, trading at approximately $64,833 as of February 7, 2026, well below Strategy's average cost of $76,052 per Bitcoin according to Coinpedia. The company now holds 713,502 BTC, which has lost nearly $9.5 billion in value since its peak in October 2025 according to market analysis. The decline has been exacerbated by broader market uncertainty and the firm's use of fair value accounting, which amplifies swings in asset values.

The company reported an operating loss of $17.4 billion for the quarter, driven entirely by the drop in Bitcoin's price. CFO Andrew Kang noted that the losses were a result of mark-to-market accounting and not from any operational issues. Nevertheless, the firm's capital-raising efforts have continued. In 2025, Strategy raised $25.3 billion in equity, making it the largest U.S. equity issuer for a second consecutive year.

Why Did This Happen?

Bitcoin has lost over 35% of its value in 2026, extending its downturn from a peak of $126,000 in October 2025 according to FXStreet. The decline has been driven by a combination of macroeconomic concerns, regulatory uncertainty, and waning institutional demand. As a result, companies like Strategy, whose valuations are closely tied to Bitcoin's performance, have seen their stock prices fall. MSTR shares have dropped 72% in the past six months, trading near $106.9 as of February 7.

Strategy has not sold any Bitcoin despite the losses. CEO Phong Le said the company has no plans to liquidate its holdings and is instead relying on its cash reserves and capital-raising abilities to meet obligations. The firm has built a $2.25 billion liquidity buffer, which is expected to cover preferred dividends for more than two years without needing to sell Bitcoin.

What Are Analysts Watching Next?

Executive Chairman Michael Saylor remains confident in the long-term Bitcoin strategy and dismissed concerns about quantum computing as part of a "parade of horrible FUD". He noted that quantum threats to Bitcoin are likely 10 or more years away and that the industry is already working on solutions to make Bitcoin quantum-resistant. Saylor also highlighted the importance of U.S. regulatory developments, which he believes remain supportive of Bitcoin and related businesses.

Investors are closely watching the firm's EV/mNAV ratio, a key metric that measures the company's enterprise value relative to the market value of its Bitcoin holdings. Currently at 1.1x, the ratio indicates that the market still values the firm at a slight premium to its underlying Bitcoin assets. However, if the ratio falls below 1x, it could signal growing concerns about the company's ability to service debt or fund future Bitcoin purchases.

Strategy's financial flexibility will also depend on its ability to raise capital at attractive prices. So far, the company has issued five preferred stock offerings in 2025, raising $5.5 billion in total. But as Bitcoin prices remain depressed, the firm may find it more difficult to raise capital without diluting shareholders. This has led to increased scrutiny of the company's capital structure and debt obligations, particularly its $8.21 billion in convertible notes maturing between 2028 and 2032.

What Does It Mean for Investors?

For investors, Strategy's situation highlights the risks of leveraged exposure to Bitcoin. The firm's shares have mirrored Bitcoin's performance closely, with sharp declines when the cryptocurrency falls and outsized gains when it rises. This correlation has made MSTR a popular leveraged play on Bitcoin's long-term trajectory, but it also means the company is more sensitive to short-term volatility.

Despite the losses, the company remains committed to its long-term strategy. Saylor said in a recent statement: "Our strategy is built for the long term. It's built to withstand short-term price volatility, even short-term extreme conditions like we're seeing today."

Analysts remain divided on Strategy's outlook. While some believe the firm is well-positioned to outperform as Bitcoin recovers, others warn of the risks if the downturn continues. The key will be whether the company can maintain its capital-raising momentum and avoid any forced Bitcoin sales that could undermine investor confidence.