Strategy’s bet on Bitcoin showed losses on paper for the first time in years, as the digital asset fell below the average purchase price of the Bitcoin buying company on Sunday.
With Bitcoin recently changing hands at $78,579, Strategy’s $56 billion position had turned positive again on Monday. The company has built up its reserve at an average cost of around $76,000 per Bitcoin since 2020, according to a Press release.
Strategy shares recovered some losses as U.S. markets opened, but remained nearly 2% below Friday’s close at just under $147, according to Yahoo Finance. In the last six months, the company’s share price has plummeted 60%, outpacing Bitcoin’s 30% drop.
Bitcoin fell to $74,591 on Sunday, its lowest level since President Donald Trump was re-elected on a pro-crypto platform in the United States 14 months ago. Strategy’s share price rose as high as $543 in the following weeks, but has fallen 74% since then.
The last time Strategy’s Bitcoin holdings showed losses, the company owned around $5.3 billion in digital assets as of October 2023. At that time, the company had bought Bitcoin at an average price of $30,252 per Bitcoin. The company then spent $49 billion on Bitcoin, acquiring convertible debt and issuing dividend-paying common stock and preferred stock.
In the press release, Strategy noted that it had purchased approximately 900 Bitcoin over the past week at an average cost of around $88,000 per Bitcoin. The increase in its holdings was financed by issuing common shares, without Strategy selling preferred shares to investors.
When Strategy sold its variable rate preferred stock, or STRC, to investors earlier this month, it logged consecutive weeks in which it bought more than $1 billion worth of Bitcoin. However, the company’s latest acquisition marks its smallest purchase since early December.
On Saturday, Strategy co-founder and CEO Michael Saylor said on X that the company was increasing STRC’s dividend rate by 25 basis points to 11.25%. That means it will cost Strategy more to raise money to buy Bitcoin as the product advances.
Last year, Strategy established a so-called dollar reserve to effectively prepay dividends, and your website It says the cash reserve can currently hold 30 months of payments. Strategy recently raised $31 million more than it spent on Bitcoin, leaving it with more cash on hand.
When STRC trades above $100, the company has said it will issue more product to keep its price in line with the threshold. On Monday, the price of the preferred stock jumped to $99.17, after falling as low as $97.95 last week, according to Yahoo Finance.