Michael Saylor’s bitcoin stack is officially underwater, but here’s why he likely won't reach for the panic button

Finance Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Michael Saylor’s bitcoin stack is officially underwater, but here’s why he likely won't reach for the panic button The main impact of the price decline is slowing Strategy's ability to buy more bitcoin without diluting shareholders, as its stock now trades at a discount to its bitcoin holdings. By James Van Straten | Edited by Aoyon Ashraf Jan 31, 2026, 9:08 p.m. Make us preferred on Google What to know : Bitcoin's drop below $76,037 per coin has put Strategy's bitcoin position slightly underwater, but has not created any immediate financial stress for the firm. Strategy's 712,647 unencumbered bitcoin and flexible options for managing its $8.3 billion in convertible debt mean it faces no forced selling or near-term solvency risk. The main impact of the price decline is to make new share issuance less attractive, slowing Strategy's ability to buy more bitcoin without diluting shareholders, as its stock now trades at a discount to its bitcoin holdings. Bitcoin's dip to around $75,500 briefly pushed the price just below Strategy’s (MSTR) average purchase cost of roughly $76,037 per coin. That may sound alarming at first glance, and it technically puts Michael Saylor's firm underwater on its bitcoin holdings, but it doesn’t fundamentally change the company’s financial position. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy . BREAKING: MicroStrategy's, $MSTR , Bitcoin position officially turns red as Bitcoin falls below $76,000. pic.twitter.com/IRZjYzJS8H — The Kobeissi Letter (@KobeissiLetter) January 31, 2026 There is no balance sheet stress and no forced selling risk. What it does is slow down its future bitcoin buying. Strategy currently holds 712,647 bitcoin — all of it unencumbered, meaning none of the holdings are pledged as collateral, so there's no risk of forced selling just because the price falls below its cost of buying. Some might question what happens to the $8.3 billion in convertible debt on its books when the bitcoin price falls below the threshold. The debt load might sound massive, but it also offers plenty of flexibility. Strategy can extend maturities (roll over its debt), convert debt to shares when they come due. Note that the first convertible note put date isn't until the fourth quarter of 2027. There are also other ways to manage the obligations. For example, other bitcoin treasury firms, like Strive (ASST), have recently used tools like perpetual preferred shares to retire its convertible debt. Strategy has similar options if needed. Where the pressure shows up is in fundraising. Historically, Strategy has mostly funded its bitcoin buys by selling new shares through at-the-market (ATM) offerings. What that means is that a company that wants to raise capital by issuing shares instructs brokers to sell them at the current market price rather than selling a large chunk of new stock at a discount. What this does is that shares are sold into the open market, minimizing the impact on the market price. But that strategy only works well when the stock trades at a premium to its net asset value (mNAV), a metric that compares a company's market capitalization to the real-time market value of its bitcoin holdings. Last Friday, when bitcoin was around $90,000 to $89,000, the multiple was about 1.15x for the strategy, indicating it was at a premium to its bitcoin holdings. But with bitcoin falling from around $85,000 to the mid-$70,000s this weekend, that premium has now flipped to a discount or below 1, making new equity raises less attractive. So trading below cost basis is not a crisis. It simply slows Strategy’s ability to grow its bitcoin stack without diluting shareholders. For context, back in 2022, when MSTR's shares traded below the bitcoin holding value for most of the year, the company added only about 10,000 bitcoin. The company likely won't go under on this, but the shares will potentially react negatively if the bitcoin price holds at these levels or falls further when markets open on Monday. Read more: Strategy's increased dollar buffer covers more than 2 years of dividend obligations Disclaimer: The analyst who wrote this article has shares in Strategy (MSTR). Michael Saylor