Strategy’s Bitcoin Treasury Turns Red After BTC Crashes Below $75,000

Bitcoin has had a sharp pullback from its recent high near $82,500. As of writing, BTC is trading around $74,858, which puts it below Strategy's cost basis of roughly $75,700 per coin. For the first time in months, Michael Saylor's bitcoin treasury is officially underwater.

At first glance, this is a disappointment — especially for the wave of retail investors who piled into MSTR over the past year. But once you zoom out and look at what Strategy itself is actually doing, and at what's driving the dip in the first place, the picture is a lot less bearish than the headline.

Year-to-date in 2026, Strategy has added more than 170,000 BTC to its treasury, a roughly 25% increase in total holdings. The most recent purchase alone was 24,869 BTC, acquired between May 11 and May 17 at an average price of $80,985 per coin — funded almost entirely (about 97%) through sales of STRC preferred stock, with the remainder coming from MSTR common. That brings total holdings to 843,738 BTC, acquired for around $63.87 billion at the blended cost of ~$75,700. Bitcoin Per Share now stands at 220,900 satoshis, and the company has reported a 12.6% BTC Yield year-to-date — meaning shareholders are getting more bitcoin per share even as the dollar value of those coins fluctuates. With BTC at $74,945, the BTC Reserve is currently valued at $63.2 billion, putting Strategy's mNAV (market cap to BTC value) at 1.21. In other words: the mechanism is working exactly as designed. Saylor isn't pausing, isn't selling, and isn't slowing the cadence. If anything, he's leaning in.

Because Strategy is essentially a leveraged bet on bitcoin, it's expected to be more volatile than the underlying. So when BTC has a rough week, MSTR has a rougher one. The question is what's actually driving the move. The recent dip is largely tied to the U.S.–Iran conflict and the ongoing crisis at the Strait of Hormuz, where roughly 20% of the world's oil transits. After the U.S. struck missile sites and mine-laying vessels in southern Iran, global markets sold off anything still perceived as "risk-on" — and despite years of bitcoin maximalists arguing otherwise, a meaningful slice of the market still treats BTC that way. Worth noting: bitcoin has actually held up better than many other risk assets since the crisis started, but personal views aside, that's the bucket traders are putting it in.

A second catalyst hit over the weekend, when bitcoin slipped below $75,000 after the SEC was reported to have delayed its decision on tokenized stocks, citing regulatory concerns. Add to that growing skepticism about whether the CLARITY Act can actually make it through Congress, and you get the perfect storm of macro and regulatory uncertainty hitting at the same time. So as is usually the case with markets, the real culprit isn't anything Strategy did — it's unpredictability. People aren't sure what happens with the world's oil supply, whether a U.S. Bitcoin Strategic Reserve actually starts buying, or whether pro-bitcoin regulation can survive a divided Washington.

Then there's the other side of the equation, which the market hasn't fully digested yet: the United States just got its first openly pro-bitcoin Federal Reserve Chair in history. Kevin Warsh was confirmed by the Senate on May 13 in a 54–45 vote, replacing Jerome Powell on May 15. Warsh isn't a recent convert — he's been publicly favorable on bitcoin for years, famously saying back in January 2021 that "Bitcoin is the new gold for anyone under 40." He's also personally invested in crypto-native firms like Bitwise and Polymarket, and his most recent financial disclosures put his net worth between $131 million and $209 million, with meaningful crypto exposure.

He's not unambiguously dovish — Warsh's reputation as an inflation hawk was the reason BTC initially dropped 14% on news of his nomination. But J.P. Morgan and others expect him to push for rate cuts driven by his "AI productivity" thesis, which argues that technology-driven productivity gains let the Fed cut without reigniting inflation. Whether he actually cuts and how aggressively remains to be seen, but the signal is clear: the new chair understands the asset, owns the asset, and isn't ideologically hostile to it. That alone is a massive shift from the Powell era. Rate cuts would, historically, be pro-bitcoin and pro-MSTR — more liquidity, weaker dollar, higher allocation to scarce assets. If Warsh delivers even a modest cutting cycle, the macro setup flips fast.

Here's the part that gets lost in the red ink: a treasury sitting at unrealized losses is a paper problem, not a structural one. Strategy's convertible notes don't carry margin call provisions, the company isn't a forced seller at any price, and STRC — its Variable Rate Series A Perpetual Stretch Preferred Stock — has continued to perform remarkably well even through the bear leg. STRC's notional has now grown to $10.49 billion, paying an 11.50% variable dividend (11.58% effective yield), doing roughly $335 million in 30-day average daily volume, and running at just 4.2% historical volatility. In other words, the capital engine that funds the bitcoin buying is functioning better in a downturn than most people expected — Strategy is raising billions in high-yield credit at near-par with bond-like volatility, then converting that capital into bitcoin. The dividend coverage tells the same story. Strategy's BTC reserve covers 36.9 years of preferred dividends at current bitcoin prices, and the USD reserve alone covers 6.1 months. Net leverage sits at just 9%. This is not a company on the edge.

That's the part that matters. Strategy's whole thesis was never "be right on bitcoin every single week." It was "build a capital structure that can buy bitcoin through every weather, accumulate faster than dilution, and let time and policy do the rest." Right now we're getting the stress test, and the machine is still humming: ATM offerings are still raising billions, STRC is still oversubscribed, BTC-per-share is still climbing, and Saylor is still buying at higher prices than the cost basis because he believes the long-run number is much higher.

Going red on cost basis is, frankly, what was always going to happen at some point. Strategy is a leveraged bet on a volatile asset — if it never went underwater, the leverage wouldn't be real. The question isn't whether the treasury is green or red on any given Tuesday. The question is whether the accumulation machine can keep running, whether the macro backdrop turns supportive, and whether bitcoin holds its long-term trajectory. On all three counts, the picture is actually looking better than the price chart suggests. The Orange March continues.