Strategy’s Stock Feels the Strain as Bitcoin Holdings Slip Underwater

Strategy US5949724083

The investment thesis for Strategy currently hinges on a single, volatile asset: Bitcoin. Recent turbulence in the cryptocurrency market was enough to push the company's substantial holdings into an unrealized loss on paper, triggering a palpable cooling of investor sentiment. This raises questions about market sensitivity, especially when no immediate liquidity crisis is apparent.

The pressure originated from a pullback in Bitcoin's spot price to around $75,000. This level is critical for Strategy, as the firm's average cost basis for its 712,647 Bitcoin holdings is approximately $76,037 per coin.

When Bitcoin dipped briefly below that entry point, it temporarily pushed the firm's portfolio—valued at around $55 billion—into an unrealized deficit exceeding $900 million. While the source material indicates no imminent liquidation pressure, partly due to the company's debt structure, the psychological impact is significant. The mere perception of being "underwater" can act as a powerful drag on market mood.

This strain is evident in the share price, which touched a new 52-week low of €116.25 in recent trading.

Preferred Dividend Hike Offers a Counterweight

Amid the core asset's volatility, Strategy announced a adjustment for its preferred shares. The dividend for the "STRC" preferreds will be increased by 25 basis points to 11.25%, effective February 2026. This marks the sixth such increase since mid-2025.

Market experts cited in the source interpret this move as an effort to stabilize the preferred shares closer to their $100 par value. This strategy aligns with a broader theme: when the Bitcoin leverage point shows instability, predictable cash flow gains importance for investors.

Key Data Points:
* Bitcoin Holdings: 712,647 BTC
* Average Purchase Price: ~$76,037
* STRC Preferred Dividend Rate: 11.25% (February 2026)

Quarterly Report to Define Financial Flexibility

The company faced additional headwinds from the broader market environment. The report cites factors including substantial outflows from Bitcoin ETFs and macro-driven sentiment shifts, such as the nomination of Kevin Warsh as Fed Chair.

Attention now turns to the upcoming quarterly results. Strategy's Q4 figures are anticipated later this week, with some references pointing to February 5. The central focus will be the company's cash flow position, given its annual interest and dividend obligations of nearly $689 million. This metric will likely define the extent of Strategy's operational leeway should the cryptocurrency market enter a more prolonged weaker phase.