Key Insights:
- The ongoing decline in Bitcoin has driven Strategy’s stock to its lowest level in two years.
- Analysts are divided on whether Saylor should pause the Bitcoin purchase or continue.
The Bitcoin sell-off is not only dragging down the whole crypto market but is also the core reason for the crisis at Strategy, the largest corporate holder of Bitcoin in the world. Broader market pressure from macro events, such as US-Iran strikes, and Strategy’s financial challenges due to Bitcoin’s decline, are making the situation worse.
NVIDIA fell around 8% as the broader Nasdaq selloff intensified this week. The decline extended losses that began after Kevin Warsh delivered hawkish remarks on Federal Reserve interest rates during his first press conference. That event triggered a sharp sell-off in equities across global markets.
South Korea’s Kospi index experienced a 10% decline in the same week. Chipmakers Micron and Marvell also fell around 13% and 9%, respectively. Nasdaq also dropped roughly 5.5% from its June high. Bitcoin got caught in the same broader pressure and is now on the edge of historic back-to-back quarterly losses.
Why is Bitcoin Hitting Strategy the Hardest?
Strategy (MSTR) fell around 9% on Thursday to $85 and to $82.31 on Friday, marking its lowest level in two years. This drop accounts for 48% decline in the last 20 trading days alone. At this price, Strategy’s enterprise market value fell to nearly the level of its own Bitcoin reserves, as per its balance sheet, a metric known as mNAV.
This pressure comes from how Strategy funds its Bitcoin purchases. The company has financed most of its accumulation through preferred stock (STRC) issuances. It is designed to trade near $100 par value while paying a fixed dividend.
However, STRC has fallen to an all-time low of $71.40, about 26% below the target. Also, annual dividend obligations on these preferred shares have quadrupled to $1.2 billion since early 2026. Cash reserves have also dropped around 38% within the same period, according to CryptoQuant analysis cited by Blockonomi.
The dividend coverage window, which indicates how long the company’s cash can survive dividend payments without selling assets, has collapsed from more than seven years to roughly 14 months.
A Split Among Analysts Over Strategy’s Next Move
CryptoQuant’s head of research, Julio Moreno, recommended that Strategy should pause Bitcoin purchases and focus on rebuilding its cash reserves. This recommendation may have been driven by the shrinking dividend coverage window before it leads to a forced Bitcoin sale.
However, Michael Saylor shared a chart on X. It showed that MicroStrategy holds 847,363 BTC as of June 28, with an average cost basis of $75,653 per coin. He made that post with a caption, “We’re gonna need more charts”, which signals further accumulation, not a pause.
Not all analysts view Strategy’s situation as a structural issue. Benchmark analyst Mark Palmer held a “Buy” rating with a target of $570 per share. He stated STRC’s decline as “a market-driven reset of necessary yield rather than a structural breakdown”. That view frames the current pressure as a temporary correction driven by risk rather than a failed underlying model.
Peter Schiff, a long-time Bitcoin critic. Wrote on X, “the best way to create shareholder value would be to sell Bitcoin to buy back shares until the discount is closed”. He further warned that a continued decline in BTC could force Michael Saylor to sell Bitcoin.
According to Schiff, forced selling could put pressure on Bitcoin price, further weakening the stock. On the other hand, Ripple CEO Brad Garlinghouse, who is bullish on Bitcoin overall, said that Saylor’s funding method for Bitcoin purchases “has damaged the wider cryptocurrency market”.
What’s Next for Strategy as Bitcoin Faces Mounting Pressure?
Strategy’s Bitcoin reserve model, funded by issuing equity and preferred stock, worked well during rallies. However, it is now facing its first sustained pressure as prices fall. The company is reporting large unrealized losses, estimated at $10.6–$13 billion. They are unrealized losses unless forced selling occurs.
The outlook will depend on developments in two separate forces, moving in the same direction. On the macro side, whether the Nasdaq sell-off eases will depend on how markets react to the Fed’s next move and any developments in Middle East tensions.
On the company side, Strategy has a 14-month dividend coverage window. It means the next few quarters of Bitcoin’s price movement will decide whether Saylor’s continued accumulation strategy can sustain or result in forced selling if pressure on Bitcoin continues.
For now, the picture is unclear. While data confirms the pressure on Strategy is real and quantifiable. Whether the mounting pressure will force Michael Saylor to rethink his aggressive accumulation strategy, or whether a Bitcoin recovery will ultimately validate his approach, remains an open question. Only time and price action will provide the answer.
