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Will MSTR stock price dip as Strategy’s BTC loss hits $900M?

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Will MSTR stock price fall as Strategy’s BTC holdings slip into $900M unrealized loss? - 1

MSTR stock price is under fresh pressure as Bitcoin’s slide below $75,000 pushes Strategy’s holdings into a $900 million unrealized loss.

Summary

  • Bitcoin’s decline has dragged Strategy’s holdings back into the red.
  • MSTR shares remain highly sensitive due to equity-funded BTC purchases.
  • Technical signals show weakness despite short-term stabilization.

Strategy’s growing unrealized Bitcoin loss is putting fresh focus on its stock, as investors weigh whether MSTR has more downside ahead or is nearing a point of stabilization.

Strategy Inc. shares are down about 61% over the past six months and were trading near $149.71 at press time. The stock dipped 0.27% in overnight trading on Sunday, following a 4.5% gain during Friday’s regular session, showing how fragile sentiment remains after months of selling.

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Bitcoin’s slide weighs on Strategy’s equity exposure

Bitcoin’s (BTC) move below $75,000 has pushed Strategy’s 712,647 BTC holdings into an unrealized loss of more than $900 million, based on data tracked by Lookonchain. The company’s average purchase price is around $76,038, leaving its position slightly underwater after the latest leg lower in the market.

While the loss is not realized, it matters for Strategy because of how closely its stock is tied to Bitcoin’s price. A January filing with the U.S. Securities and Exchange Commission showed the company continues to rely on an at-the-market share sale program, along with other securities issuance, to fund Bitcoin purchases.

This structure cuts both ways. When Bitcoin rises, Strategy’s shares often move higher at a faster pace. When Bitcoin falls, the stock can drop even more sharply, as dilution risk increases and investors focus on how many bitcoins each share represents. That sensitivity has become more visible during the recent downturn.

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Despite the drawdown, Strategy has shown no sign of changing course. Founder Michael Saylor has reiterated the company’s long-term commitment to Bitcoin, and analysts note there is no immediate risk of forced selling given the firm’s debt profile.

Will MSTR stock price fall further from here?

The ability of Bitcoin to maintain current levels will play a major role in MSTR’s next move. A deeper decline in Bitcoin could swiftly result in fresh pressure on Strategy’s stock if dilution concerns reappear. However, any Bitcoin stabilization could give the stock a stronger foundation following months of decline.

From a technical perspective, MSTR is still in a clear downward trend. The stock is trading below all major moving averages on the daily chart, and its price is close to the lower Bollinger Band.

This indicates that the downward momentum has been strong and may be stretching. The middle band, which is located between $165 and $170, still functions as dynamic resistance.

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Will MSTR stock price fall as Strategy’s BTC holdings slip into $900M unrealized loss? - 1
MSTR daily chart. Credit: TradingView

Although it has recovered from oversold readings, the relative strength index is still below the neutral 50 mark, hovering around 40. This implies that while momentum has not turned bullish, selling pressure has slightly subsided.

Bollinger Bands are starting to narrow, and volatility has also decreased in recent sessions. This increases the possibility of a sharp move in either direction and often signals a pause in the trend. The price is currently maintaining a short-term support range between $145 and $150. A daily close below that range would likely expose the stock to a move toward the low $130s.

Until MSTR can reclaim the mid-band and push RSI back above neutral, rallies may continue to attract sellers. Unless Bitcoin stages a more sustained recovery, Strategy’s stock is likely to remain volatile, with downside risks still present despite signs of short-term stabilization.

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Crypto World

Grayscale Says Bitcoin’s Quantum Problem is Mostly a Social One

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Grayscale Says Bitcoin’s Quantum Problem is Mostly a Social One

The challenge to solving the quantum threat to Bitcoin could be more social than technical, according to Grayscale’s head of research, especially if the community fails to come to an agreement on certain contentious issues.

Google released a paper that shook the crypto industry on March 30, suggesting that a quantum computer could potentially crack the cryptography protecting Bitcoin (BTC) using far fewer resources than previously thought.

Grayscale head of research Zach Pandl, however, suggested the problem for Bitcoin doesn’t come from its technical solution, as “bitcoin has lower risk than other cryptocurrencies” because it uses a UTXO model and proof-of-work consensus, does not have native smart contracts and certain address types are not quantum vulnerable.

Instead, the challenge would be for the community to reach a decision on the way forward, said Pandl. 

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The Bitcoin community has been fiercely debating what to do about old dormant coins, particularly the roughly 1.7 million BTC locked in early P2PK addresses, including Satoshi’s estimated 1 million BTC stash, currently worth about $68 billion. 

The Bitcoin community has three options 

The Bitcoin community needs to decide what to do about coins where the private key has been lost or is otherwise inaccessible, wrote Pandl. 

They have three main options: burning the coins, deliberately slowing their release by limiting the rate of spending from vulnerable addresses or doing nothing. 

“All are conceptually doable, but the challenge is reaching a decision, and the Bitcoin community has a history of contentious debates over protocol changes, including last year’s dispute around image data stored in blocks.”

Pandl was referring to a big fracas that erupted in 2023 over the use of blockspace for Bitcoin Ordinals, technology that enables inscribing data such as text and images to a satoshi, the smallest unit of Bitcoin. 

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Two years later, the debate may have quietened down, but the two sides continue to hold opposing views.

Related: Researchers say quantum computers could, in theory, be ready by 2030

About 1.7 million BTC is vulnerable to the quantum threat. Source: Grayscale

No threat now but time to get started

Pandl cautioned that it was “time to get started” and that blockchains need to adopt post-quantum cryptography, echoing the sentiment from Google. 

Both Solana and the XRP Ledger are already experimenting with post-quantum cryptography, wrote Pandl. Meanwhile, the Ethereum Foundation released its post-quantum roadmap in February.

Pandl concluded that investors “should not fret” for now, but it is time to accelerate efforts to prepare for our post-quantum future. 

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“In our view, there is no security threat to public blockchains from quantum computers today.”

Magazine: Nobody knows if quantum secure cryptography will even work