Bitcoin's weekend slide below $76,037 pushed Strategy Inc.'s massive holdings into negative territory for the first time. The firm holds 712,647 unencumbered Bitcoin at an average cost basis that now exceeds current market prices, yet analysts say the company faces no immediate solvency crisis.
CoinDesk reports that Bitcoin's drop to around $75,500 technically puts Michael Saylor's firm underwater on its holdings. The position shift creates challenges for future fundraising rather than triggering balance sheet stress.
Strategy's latest SEC filing shows the firm acquired 855 Bitcoin between January 26 and February 1, 2026, spending $75.3 million at an average price of $87,974. Those purchases now sit at immediate losses as Bitcoin trades below $76,000.
No Collateral Risk Despite $8.2B Convertible Debt Load
The firm's entire Bitcoin position remains unencumbered with none pledged as collateral. This structure eliminates forced liquidation risks even as prices dip below average purchase costs.
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Strategy carries $8.2 billion in convertible debt with flexible management options. The company can roll over maturities or convert debt to equity when obligations come due. The first convertible note put date doesn't arrive until Q3 2027, providing breathing room for Bitcoin price recovery.
The SEC filing reveals Strategy increased its dividend rate on Variable Rate Series A Perpetual Stretch Preferred Stock from 11% to 11.25% effective February 1, 2026. The company maintains $2.25 billion in cash reserves designated for dividend payments.
Other Bitcoin treasury firms have recently deployed perpetual preferred shares to retire convertible debt. Strategy maintains similar options if debt management becomes necessary.
Premium Flips to Discount, Slowing Bitcoin Accumulation
The real pressure emerges in Strategy's fundraising capacity. The firm historically funded Bitcoin purchases through at-the-market equity offerings, selling shares at current market prices to minimize impact.
Must read: Bitcoin Faces $300M Liquidation Storm Amid Global Selloff
This approach works when shares trade at premiums to net asset value. Last Friday with Bitcoin near $90,000, Strategy's multiple stood at 1.15x, indicating a premium to holdings. The weekend drop to mid-$70,000 levels flipped that premium into a discount below 1.0x.
New equity raises become less attractive when shares trade at discounts to underlying Bitcoin value. Each share sale would dilute existing shareholders relative to the company's crypto holdings.
Historical precedent shows consequences. During 2022 when Strategy shares traded below Bitcoin holding values for most of the year, the company added only 10,000 Bitcoin to its stack.
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The SEC filing shows Strategy sold 673,527 shares of Class A common stock during the reporting period, generating $106.1 million in net proceeds after commissions. The firm maintains $8.06 billion available for future issuance under its ATM program.
Strategy's 712,647 Bitcoin represents approximately 3.4% of the total 21 million supply cap. The concentration has drawn scrutiny from those concerned about network decentralization and the risks of debt-fueled accumulation strategies.
Bitcoin traded around $75,000 during weekend sessions, creating immediate mark-to-market losses on recent acquisitions. The broader crypto market experienced over $510 million in liquidations during the same period.
Strategy maintains a public dashboard at strategy.com providing real-time updates on Bitcoin holdings, financial metrics, and market performance data.
Key Takeaways:
Strategy's 712,647 Bitcoin went underwater as prices fell below $76,037 average purchase cost over weekendAll Bitcoin holdings remain unencumbered with no collateral pledged, eliminating forced liquidation risksStock premium to net asset value flipped to discount, slowing future Bitcoin accumulation through equity sales
#Bitcoin #Strategy #MicroStrategy #MichaelSaylor
#CryptoDebt This Article First Appeared on: https://www.cryptonewslive.org/article/strategys-712k-bitcoin-stack-goes-underwater-at-76k-but-flexible-debt-structure-prevents-forced-selling