Bitcoin’s Decline Raises Concerns for Strategy: 10-Month Low Impacts Purchase Price

Bitcoin's recent drop has created significant challenges for Strategy, the company previously known as MicroStrategy. Despite acquiring more Bitcoin during this downturn, the firm's average purchase price now sits above current market values, raising concerns regarding the long-term viability of its investment strategy.

Key Takeaways

Recent Purchase: Strategy bought 855 Bitcoin for about $75.3 million, averaging prices around $87,974 per token.
Market Impact: Bitcoin’s decline below Strategy’s average purchase price has heightened investor anxiety.
Stock Performance: Strategy's stock (MSTR) saw a sharp 48% drop in 2025, marking it as the poorest performer in the Nasdaq 100 index.
Upcoming Earnings: The company plans to release its fourth-quarter results, which are expected to show a modest revenue decline but improved profitability.
Current Holdings: By January 2026, Strategy's Bitcoin holdings increased to approximately 712,647 BTC.

Strategy

Strategy Purchases Bitcoin Amid Market Downturn

On Monday, Strategy disclosed an acquisition of 855 Bitcoin over the last week, spending approximately $75.3 million, with each token costing an average of $87,974. This decision comes during a significant sell-off in the cryptocurrency market, where Bitcoin has dipped below Strategy’s average entry price of $76,052, settling around $74,500. This situation raises concerns for investors, as an extended downturn could result in the company’s substantial holdings moving into negative territory.

The market's response was nearly immediate, with Strategy's stock (MSTR) plummeting by 8% as Bitcoin fell below its average price point. At one point, Bitcoin reached its lowest value since April 2024, lowering the overall value of Strategy’s Bitcoin assets to approximately $53.1 billion.

Strategy The one-day chart shows MSTR rebounding to around $142 as Bitcoin recovered to nearly $80,000 following the recent crash. Source: MSTR on TradingView.com.

As prices rebounded towards $79,000, the valuation of the company’s Bitcoin holdings bounced back to over $55 billion, offering a slight reprieve, yet clarity on the short-term outlook remains elusive.

Strategy Faces Significant Struggles in Nasdaq 100

Currently, Strategy’s shares have experienced a drastic decline, with a 48% decrease in 2025, making it the worst performer in the Nasdaq 100 index. For context, Charter Communications, the second-worst stock in the index, has dropped 39% during the same timeframe, highlighting Strategy's underwhelming performance.

Amid these challenges, Strategy is set to release its fourth-quarter financial results on Thursday. Analysts are anticipating a slight decline in revenue but a notable upswing in profitability. The Zacks Consensus Estimate predicts fourth-quarter revenue to reach $119.6 million, reflecting a 0.91% decrease from the previous year. Moreover, the company is expected to report earnings of $46.02 per share, a significant recovery from the loss of $3.20 per share in the same quarter last year.

Experts believe the fourth-quarter results will showcase the firm's ongoing financial progress, driven mainly by profits from Bitcoin investments and prudent capital management. By late January 2026, Strategy's Bitcoin holdings had surged to about 712,647 BTC, up from 640,808 as of October 26, 2025, further amplifying its exposure to market price shifts.

Despite these developments, the stock's recent performance underscores the risks associated with its strategy. Over the past three months, MSTR has declined by 43.4%, notably underperforming the broader Finance sector, which increased by 4.3% during the same period. Additionally, compared to other companies involved in Bitcoin, such as Riot Platforms, CleanSpark, and Coinbase Global—each experiencing declines ranging from 25.3% to 41.1%—Strategy has suffered the most significant losses.

Featured image from OpenArt, chart from TradingView.com.