TLDR
- Strategy (formerly MicroStrategy) stock has declined 16% year-to-date with Bitcoin’s recent pullback
- The company currently holds 499,096 Bitcoins purchased at an average cost of $66,350 per coin
- Strategy has financed its Bitcoin purchases through $9.5 billion in convertible debt, most maturing after 2027
- Despite the stock drop, analysts remain bullish with Benchmark raising the price target to $650
- The company has not sold any Bitcoin since beginning its acquisition strategy in August 2020
Shares of Strategy, the company previously known as MicroStrategy, have fallen 16% since the start of 2025, as Bitcoin’s price has pulled back from recent highs. The stock dropped over 11% on February 25 alone, bringing it to its lowest level since November and marking a 55% decline from its peak value of $473.83.
The recent downturn comes as Bitcoin slipped below $90,000 for the first time since November 2024. On February 25, the cryptocurrency’s price decreased by about 4% to $88,000, adding pressure to companies that have tied their fortunes to Bitcoin’s performance.
As of the latest reports, Strategy owns 499,096 Bitcoins acquired through investments of $43.7 billion. The company’s average purchase price stands at $66,350 per Bitcoin, leaving it with an unrealized profit despite the recent market correction.
The firm’s Bitcoin accumulation strategy began in August 2020 and has continued through multiple market cycles. Unlike some investors who sell during downturns, Strategy has maintained its holdings throughout periods of market decline, establishing itself as a steadfast Bitcoin holder.
To fund its massive Bitcoin purchases, Strategy has employed a combination of stock issuances and debt financing. The company has taken on approximately $9.5 billion in convertible debt, with most of these obligations not maturing until 2027 or later.
This extended debt timeline provides Strategy with protection against short-term price fluctuations. According to market analysis firm The Kobeissi Letter, Bitcoin would need to fall substantially below $66,000 and stay there until 2027 to force the company to consider liquidating any of its holdings.
Bitcoin Holdings Provide Buffer Against Market Swings
Despite the stock’s recent performance, many market analysts remain positive about Strategy’s outlook. Benchmark, a stock research firm, recently increased Strategy’s price target to $650. The analysts expressed confidence that the company will “continue to aggressively raise capital to fuel its bitcoin acquisition strategy during the balance of the year.”
Benchmark has focused on what they call “Bitcoin yield” as an important measure of Strategy’s performance. This metric examines the ratio of Bitcoin holdings to outstanding shares, effectively creating a Bitcoin-per-share standard to evaluate the company. Reports indicate that Strategy aims to achieve a Bitcoin yield of 15% by 2025.
The total debt of $8.2 billion compared to Strategy’s $43.4 billion Bitcoin investment gives the company a cushion against temporary market downturns. This financial structure allows Strategy to weather Bitcoin’s price swings without being forced to sell assets due to short-term pressures.
Strategy’s long-term plans for Bitcoin acquisition remain bold and far-reaching. In November, the company revealed its intention to purchase $42 billion worth of Bitcoin by 2027, shortly before its stock reached all-time highs.
Other businesses following similar Bitcoin treasury strategies have experienced comparable stock declines. Semler Scientific, which began adding Bitcoin to its treasury in 2024, has seen its stock value decrease by more than 20% since the beginning of the year.
Some market watchers have questioned whether Strategy can maintain its Bitcoin buying pace over the long term. The Kobeissi Letter pointed out that the company’s approach “is largely contingent on the ability to raise additional capital” backed by its growing Bitcoin holdings. They warned that if liabilities grow much higher than assets, this ability might weaken.
For Strategy to be forced to sell any Bitcoin, prices would need to remain below the average purchase price of $66,000 for an extended period. At current price levels, even after the recent correction, the company maintains a comfortable margin above this threshold.
The broader cryptocurrency market has been affected by ongoing sell-offs in US spot Bitcoin exchange-traded funds (ETFs). These market movements have impacted not just Strategy but the entire cryptocurrency investment landscape.
Market experts suggest that Bitcoin may see better conditions ahead, pointing to continued interest from institutional investors. They note that today’s market differs from previous downturns because both governments and institutions are developing Bitcoin reserve programs, which could create stronger long-term demand.
The cryptocurrency market continues to evolve, with Bitcoin’s price movements remaining a key factor in Strategy’s financial performance. While short-term volatility has impacted the company’s stock price, its long-term commitment to Bitcoin acquisition appears unchanged.
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