NEW YORK, February 5, 2026, 15:57 (EST)
Shares of Strategy Inc. plunged roughly 18% Thursday, dragged down by bitcoin’s fall to $63,344, hitting an intraday low near $62,503. The sharp drop revived concerns over the firm’s crypto-laden balance sheet just ahead of its earnings report. The stock last changed hands at $106.34, close to its low of $106.30.
This move matters because Strategy’s playbook — raise cash in markets, buy tokens, rinse and repeat — has become a widespread tactic in public markets. When markets turn sour, what once seemed like a smart treasury move starts to look more like a desperate funding test.
Investor’s Business Daily reported bitcoin has plunged 45% from its October high of $69,255, well below Strategy’s average buy-in of $76,052 per coin. The company holds $2.25 billion in cash, but also carries $8.2 billion in low- or zero-interest convertible debt—bonds convertible into shares—set to mature starting in 2027. This debt mix could trigger early redemptions if financial pressure mounts.
CoinDesk reported that Strategy’s paper loss on its bitcoin holdings has ballooned to roughly $6.5 billion, despite the stock still trading at a small premium over the value of its assets — meaning investors are paying more than the combined worth of its crypto and cash.
Strategy announced it will release its fourth-quarter 2025 results after U.S. markets close on Thursday and hold a live video webinar at 5:00 p.m. Eastern Time.
The selloff spread beyond a single stock. Shares of companies that stocked up on crypto reserves—dubbed digital asset treasury firms—took a hit too. That included the UK’s Smarter Web Company and Japan’s Metaplanet. U.S.-listed names connected to ether and solana holdings dropped sharply as well.
Bitcoin’s decline is part of a broader risk sell-off. Reuters noted the global crypto market has shed roughly $2 trillion since its early October high, with bitcoin falling 23% year-to-date. Tech stocks and wider volatility have hammered speculative bets. “It’s clear the crypto market is now in full capitulation mode,” said Nic Puckrin, investment analyst and Coin Bureau co-founder. Reuters
The Wall Street Journal reported that the corporate “crypto hoarding” play is coming apart, cautioning that massive paper losses could escalate if stocks lose their financing edge and companies start dumping tokens amid declining markets. It highlighted significant paper losses at Strategy and BitMine Immersion Technologies, a buyer focused on ether. The Wall Street Journal
The financing angle is what traders zero in on. When Strategy’s stock price sits above its crypto asset value, it can issue shares to scoop up more bitcoin without instantly diluting investors at a discount. But if that spread tightens or reverses, the whole setup falters.
The risk scenario is clear and grim: bigger bitcoin losses might squeeze credit conditions, accelerate debt problems, and force the company to either sell shares at low prices or cut back on bitcoin holdings — a step likely to unsettle the investors drawn in by the “never sell” promise.
The next key event is the earnings release, where management’s comments on liquidity, funding, and their plans to continue leaning into bitcoin amid the market downturn will come into focus.
