Strategy’s Market-to-NAV Slides to 0.99 as Bitcoin Bet Posts $14.5B Loss
MSTR•Strategy’s 847,363 Bitcoin holdings, acquired for $64.1 billion at an average $75,651, face an unrealized $14.46 billion loss as Bitcoin slid below $60,000. Its Market-to-Net Asset Value ratio dipped to 0.99, leaving just 9.8 months of cash for $1.71 billion in annual dividends and risking further dilution.
1. Bitcoin Holdings and Losses
MicroStrategy, now renamed Strategy, holds 847,363 Bitcoin purchased for $64.1 billion at an average cost of $75,651 per coin. As Bitcoin prices fell below $60,000, the company booked a $14.46 billion unrealized loss under the fair value rule, generating a $12.54 billion net loss.
2. Market-to-NAV Breach
Strategy’s Market-to-Net Asset Value ratio declined to 0.99 for the first time, indicating its shares now trade below the value of its Bitcoin reserves. This breach undermines the firm’s share issuance model, as issuing equity at a discount becomes increasingly dilutive and less effective for funding Bitcoin purchases.
3. Dividend Coverage and Liquidity Risks
With only $1.4 billion in cash against $1.71 billion of annual dividend commitments, Strategy has roughly 9.8 months of cash coverage unless it liquidates Bitcoin. Analysts warn this liquidity shortfall could force asset sales or further shareholder dilution if Bitcoin prices remain under pressure.
