Bitcoin's recent sharp decline has placed renewed pressure on the world's largest corporate holder of cryptocurrency reserves. For the first time since 2023, the price of Bitcoin has fallen below the average purchase cost of Michael Saylor's leveraged Bitcoin strategy at his company, MicroStrategy. The arrival of this milestone has not triggered market panic, but rather reflects a sense of fatigue—signaling that the once highly-touted model of "continuously increasing Bitcoin holdings through stock issuance" is now colliding with an increasingly skeptical market. MicroStrategy's current average cost basis for its Bitcoin holdings is $76,052, a level long viewed as a psychological support line for the market. After Bitcoin's price dropped below $76,000 last Saturday, it fell further during Asian trading hours on Monday, decisively breaching this key psychological level. This breakdown reveals a deeper reality: MicroStrategy's stock has fallen nearly 70% from its all-time high, its stock premium has evaporated, capital markets are tightening, and Saylor's entire operational strategy is facing comprehensive pressure. According to data from MicroStrategy's official website, the company has spent a cumulative $54.2 billion to accumulate Bitcoin. Data compiled by Bloomberg shows that based on Bitcoin's low of $74,541 on Monday, the market value of the company's holdings is approximately $53.2 billion. The Tysons Corner, Virginia-based company announced on Monday that it purchased an additional $75.3 million worth of Bitcoin between January 26 and February 1. The company currently faces no immediate financial pressure; it has not received any margin calls, there is no possibility of forced Bitcoin sales, and it has accumulated a cash buffer of $2.25 billion through stock offerings. However, if the Bitcoin price fails to recover and market demand for the company's stock remains weak, its room for maneuver will continue to narrow. The core mechanism of MicroStrategy's strategy is remarkably simple: raise capital by issuing stock priced above the value of its Bitcoin holdings, then use the proceeds to buy more Bitcoin. This capital markets maneuver, essentially using equity arbitrage to increase cryptocurrency exposure, made the company a favorite among speculative investors during the last Bitcoin bull market. However, this favorable period has now ended. Although MicroStrategy still holds over 713,000 Bitcoins, the market value of its holdings is steadily shrinking as the broader macro narrative for Bitcoin continues to cool. Once touted as a hedge against inflation and fiat currency debasement, Bitcoin is now failing to react to traditional positive catalysts like geopolitical turmoil, a weaker US dollar, or even favorable regulatory developments. Meanwhile, market attention and capital are shifting towards faster-moving speculative assets, ranging from AI-themed stocks to volatile gold and silver. This shift in market sentiment is making MicroStrategy's position increasingly precarious. With the stock premium gone, issuing new shares not only causes equity dilution but also fails to provide any new strategic advantage; meanwhile, Bitcoin's price hovering near the break-even level has stripped that price point of its psychological support function. The market widely expects MicroStrategy's stock price to fall further; it was down approximately 7% at the open, with losses later narrowing to 2.0%. MicroStrategy's market capitalization is now almost equal to the value of its Bitcoin holdings, meaning that even minor fluctuations in Bitcoin's price could drastically alter the market's perception of Saylor's entire high-stakes Bitcoin gamble.
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