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Strategy (MSTR), the largest corporate holder of Bitcoin, has entered a critical phase after Bitcoin fell below the company's average purchase price. The stock has dropped 78% from its cycle peak, while Bitcoin has declined 51%, according to data cited in a report by AxelAdlerJr. At the same time, Strategy has slowed Bitcoin accumulation and increased cash reserves, marking a notable shift in its treasury approach.
The report said Strategy's Bitcoin treasury now sits underwater for the first time since the 2022 bear market. The company holds 847,363 BTC at an average purchase price of $75,651, representing a total cost of $64.1 billion. Bitcoin's move below that level has increased attention on Strategy's financing model and future buying activity.
Since launching its Bitcoin treasury strategy in 2020, MSTR has generally acted as a leveraged version of Bitcoin. The stock often outperformed Bitcoin during rallies but suffered larger losses during downturns.
After the peak of the 2024-2025 cycle, both Bitcoin and MSTR moved lower. Yet MSTR declined much faster than the underlying asset. The report noted that the stock's pullback has exceeded Bitcoin's decline throughout the current correction.
MSTR has now fallen 78% from its peak. By comparison, Bitcoin remains down 51% from its cycle high. Although severe, the decline still remains above the 2022 bear market bottom, when MSTR recorded an 89% drawdown while Bitcoin fell 77%.
The report also pointed to March 2020 as a contrasting period. During the pandemic-driven market crash, Bitcoin dropped about 75%, while MSTR lost roughly 58%. At that time, the company had not yet adopted its Bitcoin treasury strategy.
Strategy's average Bitcoin purchase price of $75,651 is a critical threshold. While an underwater position does not automatically force sales, it can affect corporate behavior and capital allocation.
As Bitcoin trades below that level, pressure increases on Strategy's ability to raise capital through its existing model. The report said a shrinking premium between MSTR shares and the company's Bitcoin holdings reduces the effectiveness of aggressive stock issuance programs.
Maintaining Bitcoin below the treasury cost basis could place additional strain on the company's funding structure and future accumulation plans.
The report described a broader shift in Strategy's operating approach. Weekly Bitcoin purchases have fallen by roughly two-thirds compared with previous periods. Recent capital raises also show a different allocation pattern. Of the $335.5 million generated through stock sales, less than 11% went toward Bitcoin purchases. The remaining funds went into a dollar reserve.
As of June 21, that reserve stood at $1.4 billion. The move is characterized as a transition from aggressive accumulation toward a more defensive posture.
Read More: Bitcoin Outflows, Strategy Bitcoin Purchase, and Strive BTC Acquisition
Meanwhile, Strategy recorded its first net Bitcoin sale since 2022. In late May, the company sold 32 BTC to cover dividend payments linked to STRC.
The report also tracked the performance gap between MSTR and Bitcoin. That spread currently stands near 28 percentage points, meaning the stock has fallen substantially more than the asset it tracks. Historical data shows the spread has returned toward the upper end of its long-term range, reflecting continued pressure on the Bitcoin proxy stock.
Strategy's Bitcoin treasury has moved underwater after BTC fell below the company's average cost basis of $75,651. Meanwhile, MSTR has dropped 78% from its peak and now trails Bitcoin by a wide margin. At the same time, Strategy has reduced Bitcoin purchases, increased cash reserves, and shifted toward a more defensive treasury approach as investors monitor the key $75,651 level.
