Bitcoin's plunge causes a floating loss of $13 billion! Strategy (MSTR.US) financing model faces market questioning.

As Bitcoin falls below $60,000, it continues to put pressure on the balance sheet and stock price of Strategy (MSTR.US), the world's largest Bitcoin holding company is currently facing one of the largest unrealized losses in its corporate history. According to reports, Strategy is currently facing over $13 billion in unrealized losses based on market valuation. According to fair value accounting standards, if these losses were to be realized in the profit and loss statement, it could lead to the company recording a significant quarterly loss. According to data from BitcoinTreasuries.net, Strategy currently holds about 844,000 Bitcoins, with an average purchase cost of around $75,600 per Bitcoin. As of the time of writing, Bitcoin is trading around $59,700. For comparison, Strategy's unrealized losses now exceed the total market value of Dogecoin by $12.97 billion. In addition, these losses also exceed the market value of several major digital assets and blockchain projects, including Monero, Cardano, Chainlink, Bitcoin Cash, Litecoin, BlackRock, Inc.'s BUIDL fund, Uniswap, NEAR Protocol, Aster, and many others. The increasing unrealized losses are accompanied by a significant drop in Strategy's stock price. As Bitcoin falls to its lowest level since October 2024, Strategy's stock price has dropped to its lowest point in 28 months, falling by over 81% from its all-time high of $457.22 in July 2025. This latest drop has once again raised doubts from long-time Bitcoin critic Peter Schiff. He believes that Strategy's stock price may soon experience a significant discount compared to the value of Bitcoin held per share. Schiff posted on the social platform X, saying, "Strategy is still collapsing. I think this stock may soon experience a significant discount of up to 40% compared to the value of Bitcoin held per share. The best way to create value for shareholders is to sell some Bitcoin and buy back company stock until this discount disappears." Further exacerbating market concerns began in early June this year. At that time, Strategy disclosed the sale of 32 Bitcoins, the first time the company had sold Bitcoin since 2022. Although the sale is insignificant compared to its large holdings, this move broke founder Saylor's long-standing promise of "never selling Bitcoin" and caused the market to reevaluate the core assumptions on which its financing model is based. Meanwhile, the overall funding situation in the crypto market continues to deteriorate. Data shows that retail investor participation continues to decline, with cumulative net outflows from Bitcoin spot ETFs approaching $3 billion in June, and many investors who bought in early in the ETF's listing are still in a loss-making position, further weakening the willingness to invest new funds. Analysts believe that this indicates that the Bitcoin market is increasingly reliant on institutional funding. Meanwhile, right at this moment, Strategy, as one of the largest institutional buyers, is beginning to face market scrutiny over its financing system. The core of market concerns lies in the fact that Strategy has long relied on issuing securities such as stocks and preferred shares to finance, and then continued to use the raised funds to buy Bitcoin. This model helped the company become one of the largest corporate Bitcoin holders globally and has been a major source of incremental funds driving the continuous rise in Bitcoin prices. However, as Bitcoin prices have been consistently below $60,000 for a long time, the company's financing costs continue to rise, and the price of its preferred stock STRC has dropped significantly. More and more investors are beginning to question whether this financing model can continue to sustain itself. Among them, STRC preferred shares have become the focus of market attention. Strategy positioned STRC as an important financing product for the general public market, hoping to attract ordinary investors to participate in the company's Bitcoin strategy and provide an investment tool with lower volatility than common stocks through a higher monthly dividend yield. However, since its listing, STRC's performance has fallen far below market expectations. Data shows that the price of these preferred shares has fallen from $100 at issuance to around $75, causing a significant loss to many investors who were hoping to indirectly invest in Bitcoin through this product. At the same time, with a continuous reduction in buying volume, STRC's yield continues to rise, meaning that Strategy's future financing costs through the issuance of preferred shares will significantly increase, thereby weakening its ability to continue buying Bitcoin on a large scale. Analysts point out that STRC represents an attempt at recent innovations in crypto finance, packaging high-volatility crypto assets in income securities in hopes of attracting a broader range of investors. However, as the market continues to adjust, the risks of this model are gradually being exposed. Unlike traditional corporate bonds, STRC has no fixed maturity date, no Bitcoin assets as collateral, and its dividend can be decided by the board of directors whether to cut or suspend it, making the actual risk much higher than many investors initially realized. Alex Blume, founder and CEO of Bitcoin asset management company Two Prime, even warns that Strategy's recent weak performance is making the market recall some major risks that the crypto industry has experienced in the past, "The recurring problems with Strategy are making the market uneasy, leading people to think of some major crises that the crypto market has experienced before." Andreja Cobeljic, Head of Derivatives Trading at Amina Bank, bluntly said that while the recent drop in Bitcoin is undoubtedly affected by the cyclical weakness of the market, the real factor driving the worsening market sentiment is the declining confidence in Strategy's financing model. He said, "The direct cause of Bitcoin's recent decline is the market's cyclical weakness, but the deeper DRIVE is the impact on the credibility of Strategy's strategy."