Strategy Bitcoin Underwater After 30% BTC Crash

Bitcoin slumped on Saturday, dropping below $80,000 for the first time since April 2025. The maneuver crossed out the pullback to more than 30% from its peak. The drop focused renewed attention on Strategy’s cost basis and the fact that on-chain demand was fading. As of press time, BTC is trading at $78,721, down by 5.27% over the past 24 hours. The decline extended a selloff that has persisted for weeks.

How Strategy’s Balance Sheet Handles Bitcoin Volatility

The decline dropped spot below Strategy’s average buy price around $76,000, which put its position underwater on paper. Analysts added that the price level does not risk forced selling. Strategy’s 712,647 Bitcoin are unencumbered and never been put for collateral.

Worries have also taken hold around Strategy’s $8.2 billion in convertible debt. The first put date of the convertible note is in the 3rd quarter of 2027. That schedule permits a refinancing, extension or conversion into stock at maturity.

The pressure point is fund-raising, not solvency. Strategy has typically financed these purchases through at-the-market equity issuances. Those offerings tend to perform best when the stock is trading at a premium to the value of its Bitcoin holdings.

A prior downturn offers a reference point. In 2022, the company had added about 10,000 Bitcoin when shares were trading below the value of its Bitcoin for most of the year.

Strategy co-founder Michael Saylor took passing swipes at liquidation fears in previous comments. He said the company would not be liquidated in even a major drop in Bitcoin. Saylor portrayed a violent downside as the time to just keep buying.

In an X post, Analyst Shah estimates indicate that Saylor took out approximately $10 billion and acquired spot Bitcoin. It also said annual profit of around $50 million would repay debt even if Bitcoin remains under the average cost.

As CoinGape reported, Bitcoin faces risk of a deeper decline. Technical signals suggest more weakness ahead, with analysts cautioning that a return to the $66,000 level could be on the cards if selling pressure continues.

On-Chain Metrics Undermine Bull Market Case

CryptoQuant CEO Ki Young Ju identified the reason for the fall by stating that it was due to the lack of capital formation. He explained that the Realized Cap had flatlined, which meant that there was “no fresh capital” entering the market. Analyst argued that if the market cap falls in this situation, it is not a bull market.

According to Ju, the old investors still hold large unrealized profits due to ETFs and company buying in the previous periods. He added that the process of profit-taking has been ongoing since the early part of last year. Ju added that the inflows used to sustain the price at $100,000 but that the inflows are no longer there.

The CryptoQuant CEO explained that large institutional and company buying were a major contributor to the previous bull market. He added that the major holders’ activity is a significant contributor to the price swings in the Bitcoin market. 

Ju added that a -70% fall like the previous market cycles is not expected unless the Strategy sells its assets in large quantities. He stated that the selling is still ongoing, hence the lack of a clear bottom. The outlook by the CryptoQuant CEO was a consolidation range. This is because the market is still at a point where the supply is being absorbed slowly.