MicroStrategy Faces $13B Bitcoin Loss and Preferred Stock Plunge
MSTR•MicroStrategy holds an unrealized $13 billion loss on its bitcoin holdings as digital assets slide over 30% year-to-date, pushing its STRC preferred stock down about 25% from par. The company projects roughly 10 months of cash reserves to fund dividends on its twice-monthly, 12%-yielding preferred shares.
1. Bitcoin Market Slide
Bitcoin trading near two-year lows at roughly $59,900, down over 30% year-to-date, while ethereum dropped nearly 50% to $1,580. Outflows from U.S.-listed spot bitcoin ETFs hit a YTD net $4.6 billion, weighing on market sentiment and shrinking total crypto market cap to about $2 trillion.
2. $13 Billion Unrealized Loss
MicroStrategy’s bitcoin holdings reflect an unrealized loss of approximately $13 billion as prices remain below key support levels. This paper loss intensifies scrutiny on the company’s balance sheet given its large bitcoin treasury strategy.
3. STRC Preferred Stock Volatility
The company’s STRC preferred stock plunged nearly 25% from its engineered par level of $100, sliding to an intraday low of $71.25 before settling around $75.30. The yield-bearing product distributes dividends twice monthly at over 12% yield and has underperformed amid heightened volatility.
4. Dividend Runway and Capital Structure
With current cash reserves, MicroStrategy projects enough liquidity to fund STRC dividends for roughly 10 months. Executive Chairman Michael Saylor acknowledged that volatility tests capital structures, emphasizing disciplined capital allocation and credit quality to support long-term value creation.
