$13 Billion Paper Loss Stuns Markets
Strategy Inc. (MSTR), the world’s largest corporate holder of bitcoin, is facing a staggering paper loss of more than $13 billion on its bitcoin holdings, as the cryptocurrency’s price has tumbled to
The scale of this loss is not just eye-catching—it’s historic. Strategy’s paper deficit is greater than the market caps of established projects like Cardano, Chainlink, Litecoin, and even BlackRock’s BUIDL fund. On paper, Strategy controls more bitcoin than most countries’ reserves; in reality, its bet has left it exposed to one of the largest single-asset drawdowns in corporate history.
Strategy’s average acquisition price of $75,600 per bitcoin now sits well above the current market value of around $60,000.
STRC’s Bitcoin Link Hits Record High
The company’s perpetual preferred stock, known as STRC or “Stretch,” has seen its fate increasingly tied to bitcoin itself. The 90-day correlation coefficient between STRC and BTC has surged to nearly 0.70—its highest level since STRC launched in July 2025—making the preferred stock almost a proxy for direct bitcoin exposure. This month alone, STRC dropped 23% to $76 while BTC slid nearly 20% to under $60,000.
A product marketed as low-volatility income now mirrors the volatility of the world’s most famous cryptocurrency.
STRC was designed with a $100 par value and pays monthly cash dividends at an annualized rate currently set at 11.5%. However, as STRC trades more than 25% below par—recently at $74.13 according to Yahoo Finance—the board’s ability to adjust dividends has not been enough to stabilize its price or investor sentiment.
Dividend Pressure Forces Rare Bitcoin Sale
One consequence of these market moves is that Strategy has been forced to break from its previous “never sell” stance on bitcoin. Earlier this month, the company sold 32 BTC for approximately $2.5 million—the first such sale since 2022—in order to meet dividend obligations on STRC. This shift was significant: until now, Michael Saylor and his team had maintained that all bitcoin acquired would be held indefinitely.
At the start of this year, Strategy had enough cash reserves to cover STRC dividends for seven years (about $2.25 billion). That buffer has shrunk considerably; current reserves can only support dividend payouts for roughly 14 months.
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Retail Investors Flee as Cash Dwindles
Retail confidence appears shaken by these developments. On Thursday, MSTR shares fell 8% to $86—their lowest point since February 2024—while STRC dropped further to $75 per share, widening its discount from par value. The company now holds about ten months’ worth of U.S. dollar reserves for future dividends on STRC.
Analysts have noted that with STRC trading so far below par value, Strategy’s ability to raise new funds by issuing additional preferred shares is severely hampered. Alexander Blume of Two Prime pointed out that repeated changes in Michael Saylor’s approach have eroded trust among retail investors who once saw Strategy as a stable gateway into crypto-linked yild products.
Why It Matters: Practical Impact
The consequences extend beyond just headline losses or temporary price swings. As reported by decrypt.co, over $1.44 billion in crypto positions were liquidated in a single day amid these declines—with bitcoin accounting for $658 million of that total—showing how interconnected Strategy’s actions are with broader market sentiment and liquidity events.
On paper, Strategy remains a titan with over 847,000 BTC under management; but with core products like STRC trading at steep discounts and cash reserves dwindling from years down to months, practical questions loom about how long it can sustain its aggressive approach without further destabilizing both its own capital structure and potentially wider crypto markets.
What deserves close attention
If STRC, Strategy Inc.’s perpetual preferred stock, continues to trade well below its $100 par value—currently at $74.13 as of Thursday—Strategy’s ability to efficiently raise new capital for further bitcoin purchases will remain constrained, and any additional BTC sales to cover the 11.5% annual dividend would immediately signal further deviation from its “never sell” policy.
