Michael Saylor’s Bitcoin Strategy Faces Pressure as 40% of Holdings Fall Into Red With BTC Below $90,000

Michael Saylor’s Bitcoin Strategy Faces Pressure As Holdings Dip Below $90,000

Michael Saylor’s Bitcoin-heavy strategy is under scrutiny as the company’s massive BTC holdings take a hit.

Following a drop in Bitcoin below $90,000 for the first time in seven months, around 40% of Strategy’s Bitcoin stack is now unprofitable.

The company holds approximately 649,870 BTC, making it one of the largest corporate holders of the digital asset.

Recent Purchases Deepen Losses

Just days ago, Strategy bought 8,178 BTC at an average price of $102,171, a move that has now resulted in nearly $100 million in unrealised losses with Bitcoin trading near $92,000.

Previously, at $106,000, the company’s holdings were roughly 90% in profit, but the profitability has now dropped to around 60%.

Critics have been quick to highlight the risk, pointing to the pressure on Strategy’s stock ($MSTR), which has fallen approximately 55% from its peak earlier this year.

The stock closed at $206.80, marking its lowest level since October 2024 and wiping out an estimated $72 billion in market value.

Peter Schiff Challenges Saylor And Critiques Bitcoin Strategy

Long-time Bitcoin critic Peter Schiff has labelled Strategy’s business model “a fraud,” challenging Saylor to a debate at Binance Blockchain Week in Dubai this December.

In an X post, Schiff wrote:

“Regardless of what happens to Bitcoin, I believe MSTR will eventually go bankrupt.”

He also highlighted Bitcoin’s fall relative to gold, noting that the cryptocurrency is down 40% when priced in ounces of gold.

He added, questioning the strength of the “digital gold” narrative,

“Those who bought into it will sell.”

Market Volatility Adds Pressure

Bitcoin has dropped over 25% from its all-time high of more than $126,000, dipping through key psychological levels and triggering losses for leveraged traders.

While Saylor has maintained a visible presence when Bitcoin rises, he has been notably quiet during this drawdown, posting only “₿elieve” and “HODL” without addressing the growing unrealised losses.

Over the past seven days, Bitcoin has fallen roughly 12%, currently trading around $90,903.54, with a minor recovery pushing the broader crypto market to a cumulative cap of $3.199 trillion and a 24-hour trading volume of $83.8 billion.

Ethereum, XRP, and Solana also posted gains of 3-7% in the same period.

Saylor Maintains Confidence Amid Losses

Speaking to Fox Business, Saylor downplayed concerns over market volatility, stating that Bitcoin’s annualised volatility has fallen from about 80% in 2020 to around 50% today.

He suggested the asset is maturing and projected further gradual declines in volatility over the coming years.

He asserted:

“The company is engineered to take an 80 to 90% drawdown and keep on ticking… So I think we’re pretty indestructible.”

Despite the losses, Strategy’s mNAV multiple has dropped to 1.003x from around 1.52x when Bitcoin hit $125,100 on 5 October.

The firm’s BTC holdings remain valued at $59.59 billion at the time of publication, highlighting the scale of the exposure.

Aggressive Accumulation Strategy Raises Concerns

Strategy’s recent acquisition of 8,178 BTC, funded through preferred stock issuances, signals continued commitment to a Bitcoin-first treasury model.

The purchase was made at an average price roughly 10% above current market levels, further intensifying concentration risk.

Analysts warn that this approach could amplify the firm’s exposure to market swings and raise questions over capital structure sustainability.

Economists and crypto experts have voiced concerns that Strategy’s approach could harm Bitcoin’s market dynamics.

Vinny Lingham, co-founder at Praxos Capital, said Saylor’s model “is the opposite of what Bitcoin was meant to be,” potentially affecting price action and investor confidence.

Helius Labs CEO Mert Mumtaz noted the pattern of buying aggressively at highs but remaining inactive during market dips, saying:

“So their strategy is literally buy high and then do nothing? Just a creative way of driving crypto money to CNBC, it seems.”

Potential Risks For Strategy’s Balance Sheet

Despite analysts’ warnings, Saylor has insisted that MSTR could survive a major Bitcoin downturn.

He noted that a drop to around $12,650 per BTC would put the company in serious trouble, as the value of its holdings would roughly equal its total debt of $8.22 billion.

However, with convertible notes lacking strict covenants tied to Bitcoin prices, forced liquidation is not immediate.

Saylor reiterated that even an 80-90% decline (to ~$18,800-$9,400) would leave the company overcollateralised.

Veteran trader Peter Brandt cautioned that Strategy could be “underwater” if Bitcoin follows patterns similar to historical market bubbles, echoing wider concerns over concentrated exposure.

Strategy’s Role In The Broader Crypto Market

Strategy’s accumulation continues to influence supply dynamics and institutional sentiment.

Large-scale purchases at market lows can signal confidence, but they also concentrate risk and reduce liquidity.

Analysts argue that the rise of corporately held, leveraged Bitcoin assets like MSTR and other Digital Asset Treasuries (DATs) moves Bitcoin away from its original vision as a censorship-resistant, private store of value.

Currently, nearly 9% of all Bitcoin is held in ETFs or government treasuries, exposing the market to custodial and regulated structures.

While Strategy maintains that Bitcoin is a long-term reserve asset, its growing leverage and public market exposure tie its financial health directly to BTC price trends.

Shareholders and market observers will be watching closely to see whether Saylor’s conviction can weather the current downturn or if concentrated exposure will amplify volatility for both the company and the wider crypto market.