Bitcoin’s drop below Strategy’s average purchase price has wiped out tens of billions in paper profits and triggered a sharp cut in the price target from one of Michael Saylor’s most upbeat analysts
Strategy will report its quarterly results after the U.S. market closes today, which makes movements in the bitcoin price, the balance sheet and any new share issuance particularly sensitive for investors.The Norwegian lawyer and capital manager Frederik Lund, currently Chief Legal & Capital Officer at Swedish 4+Ventures, has in recent days summed up five years of Michael Saylor’s bitcoin strategy on Linkedin – arguing that some bitcoin treasury companies will fail, but that he does not believe it will start with Strategy.
Strategy, formerly MicroStrategy, has over the past five years transformed itself into the most aggressive publicly traded bitcoin treasury company, funded through debt, preference shares and ongoing stock sales in the market. After riding the bitcoin recovery and building up tens of billions of dollars in unrealized gains, the company entered 2026 with a large bitcoin holding, a substantial cash buffer, and a business model tied in practice to bitcoin's long-term price performance, rather than the software business. The level around $76,000 is now singled out in several analyses as a key point level - both technically and accounting - because it is close to Strategy's average purchase price and affects how the market assesses balance and earnings.
Frederik Lund, Chief Legal & Capital Officer (CLCO) of Swedish 4+Ventures, has published a post on LinkedIn in which he summarizes five years of Strategy's capital raising, bitcoin purchases and unrealized gains. His review shows how the company has spent billions of dollars building up bitcoin holdings, seen its unrealized gains grow to tens of billions below the 2024 peak, and then disappear again after bitcoin fell below Strategy's average cost price. Lund also places Strategy in a broader sector, writing: “Yes, I do believe that we will see Bitcoin Treasury companies that will fail soon. Well, I do not believe that it will start with Strategy.” The quote illustrates that professional players see high risk in the bitcoin treasury model as a whole, while Strategy is still perceived as one of the more robust players.
Longtime bull‑analyst Joseph Vafi has now reduced his 12-month price target from $474 to $185 a share, a cut of more than 60 per cent, while retaining a buy recommendation. The cut mirrors a brutal downturn in the stock: Strategy has fallen sharply from its November 2024 record levels as bitcoin has corrected from its peak, and Vafi now describes bitcoin as in an “identity crisis” between the narrative of digital store of value and the behavior of a risky growth-asset class. That one of the most positive analysts is adjusting its price target so sharply but not going for a sale illustrates the tension between long-term faith in the model and short-term skepticism in the stock market.
An analysis from Benzinga concretizes how dramatically the unrealized gains have fluctuated. At the peak, Saylor's bitcoin strategy had generated about $47 billion in unrealized gains on the company's BTC holdings; with bitcoin now below Strategy's reported average cost of around $76,000, this has translated into a smaller unrealized loss. Yahoo Finance cites $76,000 as a critical level: above this limit, Saylor can still tell a story of unrealized gains and long-term accumulation, while heading below the level shifts attention to paper losses, past issues and uncertainty around further purchases without further strain on shareholders. At the same time, much of the exchange's “premium” on strategy is gone: the company's market capitalization is now below the value of its underlying bitcoin holdings, rather than pricing in a significant mark-up to its net worth that previously justified the most optimistic price targets.
While the picture looks dramatic, a recent review published on Binance's Square platform points out that Strategy faces neither margin calls nor forced bitcoin sales. The company's BTC is not collateralized, the bulk of its debt does not mature until the end of the decade, and the cash buffer has been built up to cover interest and preference dividends for several years to come. This is consistent with Strategy's own communications and previous reports of how Saylor has tried to engineer its balance sheet to withstand heavy volatility, by avoiding financing that could force the company to sell bitcoin in a fall. The combination of unrealised losses and the absence of forced sales means that the discussion is more about shareholder returns and issue risks than about insolvency or outright bankruptcy risk.
