TLDR
- Strategy has purchased 13,390 more Bitcoin, raising its total holdings to 568,840 coins.
- The company spent approximately $1.34 billion on the latest Bitcoin buy at an average price of $99,856 per coin.
- Strategy’s total Bitcoin investment now stands at around $39.41 billion with an average cost of $69,287 per coin.
- Peter Schiff warns that losses could become severe if the Bitcoin price drops below the company’s cost basis.
- Schiff believes Strategy’s rising average cost increases the risk of financial exposure during market downturns.
Michael Saylor’s firm, Strategy, has added 13,390 more BTC, pushing its total Bitcoin holdings to 568,840 coins. The company spent approximately $1.34 billion on the latest purchase at an average Bitcoin price of $99,856. This move has raised the company’s total Bitcoin investment to roughly $39.41 billion, with an average cost of $69,287 per coin.
Bitcoin Price Dip Could Hit Strategy Hard
The rising Bitcoin price has driven up Strategy’s average acquisition cost, now likely exceeding $70,000 per coin. As a result, Peter Schiff warns that a decline in the BTC price could create massive unrealized losses for the company. He emphasizes that Strategy’s exposure grows riskier each time it increases its position at higher prices.
You next buy will likely push your average cost above $70,000. The next leg down in Bitcoin will likely push the market price below your average cost. Not good considering how much you borrowed to buy the Bitcoin. When you sell, small paper losses will become huge real losses.
— Peter Schiff (@PeterSchiff) May 12, 2025
Strategy’s continuous Bitcoin accumulation raises the financial risk tied to market volatility, especially given the firm’s leveraged purchases. A lower BTC price would affect portfolio value and pressure the collateral behind Strategy’s debt. Schiff argues that this could lead to significant balance sheet stress if the Bitcoin price dips below the current average cost.
Strategy maintains that it has no intention of selling its holdings despite growing market concerns. However, the higher the average cost climbs, the less cushion Strategy has against a downward Bitcoin price movement. Schiff’s analysis indicates that borrowing to buy at high levels increases the risk of large-scale capital erosion.
Falling Bitcoin Price Could Trigger Forced Sales
Strategy’s Bitcoin strategy has been funded partly through substantial debt offerings, adding another layer of financial strain. Schiff points out that falling Bitcoin price levels could lead to margin pressure, especially if lenders reevaluate the company’s collateral value. With over half the enterprise value tied to Bitcoin, declining prices may trigger broader financial implications.
Strategy’s market position depends heavily on the BTC price staying above key thresholds to maintain positive leverage. Schiff warns that unrealized losses could rapidly turn real if the price drops further, forcing hard decisions. Debt-fueled positions become particularly vulnerable in down cycles where liquidity might dry up quickly.
While the company currently trades at $413.44 per share, any sustained Bitcoin price drop could pull the stock down. This scenario may reduce the available capital buffer and raise the likelihood of forced Bitcoin sales. Schiff has raised these warnings, but they carry more urgency given the rising cost base.
