MicroStrategy now “Strategy” Faces $6B Bitcoin Loss, May Be Forced to Sell BTC to Cover $8B Debt

Sean Williams
microstrategy-

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MicroStrategy, once a software powerhouse, has found itself in a precarious financial situation after heavily investing in Bitcoin. The company’s strategy of accumulating the cryptocurrency has backfired as the price of Bitcoin has significantly decreased, putting the firm’s financial health in jeopardy.

With a total of 528,185 Bitcoin holdings, MicroStrategy’s average acquisition price per Bitcoin is a hefty $67,458. Unfortunately, as Bitcoin’s value has dropped, the company’s holdings have plunged in value, leading to staggering losses. In fact, as of Q1 2025, MicroStrategy’s total losses amount to approximately $6 billion. The company is now facing a crucial dilemma—sell some of its Bitcoin assets at a loss to meet its financial obligations.

MicroStrategy’s transition from a software firm to a Bitcoin investor has created significant challenges. The company’s $8 billion debt requires it to pay substantial annual interest and dividend expenses, but insufficient revenue from software operations has made it increasingly difficult to stay afloat. In the past, MicroStrategy maintained that Bitcoin’s volatility would not pressure them into selling, but with the cryptocurrency now trading close to its acquisition cost, the situation has shifted.

This shift is compounded by additional Bitcoin purchases at higher prices. For instance, in November 2024, the company acquired 275,965 BTC at an average price of $93,228. This new acquisition alone has resulted in unrealized losses of nearly $4.6 billion.

Source: CMC Data

Adding to the strain are external macroeconomic factors. Risk assets like Bitcoin typically suffer in a recessionary environment, and Goldman Sachs has forecasted a 45% chance of an economic downturn in the U.S. With the risk of further Bitcoin price declines, MicroStrategy’s financial position could worsen, leading to panic selling if Bitcoin falls below its average cost basis of $67,000.

Also Read: MicroStrategy Halts Bitcoin Purchases as BTC Price Crashes Below $80K

In the coming months, MicroStrategy’s ability to navigate this turbulent landscape will determine its financial future and the long-term viability of its Bitcoin strategy.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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