MicroStrategy's Bitcoin Strategy Faces $3 Billion Loss

MicroStrategy's executive chairman, Michael Saylor, has faced mounting pressure due to significant losses from his aggressive Bitcoin acquisition strategy. Over the past four months, Saylor's purchases have resulted in an unrealized loss of $3 billion, marking one of the worst periods in his investment history. microstrategy accumulated billions of dollars worth of Bitcoin between November 2024 and March 2025, with purchase prices ranging from $84,000 to over $106,000 on average. Notably, on February 24, MicroStrategy bought 820,356 Bitcoin at an average price of $97,514, which is currently down by almost $318 million. Additionally, the company recently purchased 22,048 BTC for around $1.92 billion at approximately $86,969.

The most substantial loss came from the January 27 purchase of 810,107 Bitcoin at $105,596 each, which is currently at a 24% drawdown, resulting in an unrealized loss of $269 million. The total loss from these entries exceeds $3 billion due to a significant mismatch between the timing of the purchases and the state of the market. Saylor's most active buying period coincided with the local peak of Bitcoin in early 2025, leaving MicroStrategy vulnerable to the subsequent market correction. Despite Saylor's long-term thesis, the market has cooled off, and these positions will likely remain in deep red unless Bitcoin sees a significant upward recovery.

These losses underscore the risks of aggressively dollar-cost averaging (DCA) during periods of peak bullish sentiment, even for long-term investors. Saylor's strategy of making Bitcoin a corporate treasury asset has come under scrutiny, as the strain on MicroStrategy's balance sheet may worsen if Bitcoin does not swiftly rise back above the $90,000-$100,000 range. The recent market downturn has put MicroStrategy's investment approach to the test, leading to considerable financial setbacks and raising questions about the effectiveness of their strategy.