Connect with us
DAPA Banner

Crypto World

MicroStrategy Faces $1 Billion Paper Loss as Bitcoin Drops

Published

on

Bitcoin (BTC) Price Performance

Bitcoin’s (BTC) brief fall below $75,000 on February 1, 2026, pushed Strategy’s (formerly MicroStrategy) BTC holdings into unrealized losses of around $1 billion.

The drawdown comes amid signals of additional purchases from the world’s largest corporate Bitcoin holder, which has continued its long-standing accumulation strategy, often buying BTC in consecutive weekly streaks

Sponsored

(Micro) Strategy’s Position Under Pressure Amid Bitcoin’s Latest Decline

Bitcoin has continued to face market headwinds, extending its decline by more than 12% over the past seven days. During early Asian trading hours on February 1, the asset fell below $75,000 for the first time since early April 2025, briefly touching a low of $74,544 on Binance before staging a modest rebound.

Advertisement

BeInCrypto Markets data showed that at press time, Bitcoin was trading at $75,826, down 3.9% over the past 24 hours. The latest pullback has weighed on major corporate holders, including Strategy.

Bitcoin (BTC) Price Performance
Bitcoin (BTC) Price Performance. Source: BeInCrypto Markets

Strategy, under Executive Chairman Michael Saylor, holds 712,647 BTC with an average purchase cost of $76,037 per coin. At current prices, Strategy’s Bitcoin treasury reflects unrealized paper losses of approximately $150 million. When Bitcoin dipped to $74,544 earlier in the session, those losses briefly expanded to nearly $1 billion.

“Every dip in BTC wipes billions in paper value off their balance sheet. This shows just how risky corporate Bitcoin exposure can be, even for major players,” a market watcher posted.

Sponsored

The losses are not limited to Strategy. Data from BitcoinTreasuries showed that several other corporate Bitcoin holders are also sitting on significant unrealized losses.

Metaplanet’s Bitcoin position is currently down 30.13%, while Strive’s holdings reflect unrealized losses of 28.97%. GD Culture Group’s Bitcoin treasury is showing a paper loss of 35.59%.

Advertisement

Still, Strategy is committed to its Bitcoin strategy, with Saylor hinting at further BTC accumulation. If the firm buys Bitcoin again this week, it would mark its fifth BTC purchase of the year. Its largest acquisition to date occurred on January 20, when the company bought 22,305 Bitcoin.

To support continued purchases, Strategy has raised the dividend rate on its Series A Perpetual Stretch Preferred Stock (STRC) to 11.25%, effective February 2026, aiming to attract additional capital. Overall, proceeds from STRC sales have financed the acquisition of more than 27,000 BTC.

Bitcoin’s decline has had broader implications beyond corporate holders’ balance sheets. According to data from CryptoQuant, Bitcoin is now trading below the Bitcoin US ETF Realized Price, suggesting that US spot Bitcoin ETF investors are, on average, holding positions at an unrealized loss.

Sponsored

Advertisement

The move below ETF cost bases could test whether institutional buyers remain committed should prices stay depressed.

Bitcoin Risks Deeper Pullback as Analysts Flag $55,000 to $58,000 Downside Zone

As Bitcoin’s drawdown extends, the near-term outlook has grown increasingly cautious. Some analysts warn that the asset could slide toward the $58,000 to $55,000 range.

Analyst PlanB pointed out that Bitcoin’s 200-week moving average currently sits near $58,000. At the same time, Bitcoin’s realized price, which represents the average on-chain acquisition cost of all circulating coins, has declined to around $55,000 and continues to trend lower.

Sponsored

Advertisement

Momentum indicators have also weakened, with the Relative Strength Index falling below the neutral 50 level. Historically, Bitcoin has often retraced toward either the 200-week moving average or the realized price, suggesting a potential downside range between $55,000 and $58,000 if the pattern repeats.

“However bull has been weak (no red) so bear might be shallow,” PlanB added.

With Bitcoin now trading below key cost bases and long-term support levels in focus, the coming weeks may prove critical in testing institutional conviction. A sustained move lower could once again place corporate holders under scrutiny, as a sharper downturn would amplify unrealized losses across large Bitcoin treasuries.

Source link

Advertisement
Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

Every 5 Minutes: Korea’s New Rule for Crypto Exchanges

Published

on

South Korea’s financial regulator has ordered all crypto exchanges to verify user asset balances every five minutes, following a massive overpayment incident that shook market confidence earlier this year.

One botched reward payout exposed systemic cracks across the entire industry.

What Triggered the Rules

In February, Bithumb accidentally sent 2,000 BTC per person instead of 2,000 Korean won ($1.40) during a promotional event. The error amounted to roughly $42 billion in misallocated crypto. The Financial Services Commission (FSC) launched emergency inspections across all five major Korean exchanges immediately after. What they found went far beyond a single human mistake.

Most exchanges were only reconciling their books once every 24 hours. Three had no automatic kill switch to halt trading when discrepancies appeared. Four lacked multi-step approval systems for high-risk manual transactions. Two exchanges hadn’t even separated their general accounts from high-risk transaction accounts — a basic safeguard.

Advertisement

What Exchanges Must Now Do

The FSC announced a three-pillar reform package on April 6. Exchanges must run automated balance checks every five minutes, with alerts and automatic trading halts triggered by major mismatches. Monthly external audits replace the previous quarterly schedule, and public disclosures must now include asset-by-asset blockchain holdings rather than a simple coverage ratio.

For manual, high-risk transactions such as event payouts, exchanges must use separate accounts, deploy validity-check systems that automatically reject mismatched inputs, and require cross-verification by a third party before execution.

The FSC will also require exchanges to appoint dedicated risk management officers and establish risk management committees — standards already expected of traditional financial firms. Compliance checks move from annual to twice-yearly, with results reported to regulators.

DAXA, the industry body, will complete self-regulatory amendments this month, with systems built out by May. Key provisions will feed into Korea’s forthcoming second-phase Digital Asset Act.

Advertisement

The post Every 5 Minutes: Korea’s New Rule for Crypto Exchanges appeared first on BeInCrypto.

Source link

Continue Reading

Crypto World

Chaos Labs Leaves Aave Due to Budget, Risk Disagreements

Published

on

Chaos Labs Leaves Aave Due to Budget, Risk Disagreements

Chaos Labs has parted ways with the Aave ecosystem after serving as the crypto lending protocol’s main risk service provider for three years, citing a budget dispute and disagreements over how Aave should manage risk.

“This decision was not made in haste,” Chaos Labs founder Omer Goldberg said in a post to X on Monday. “We worked in good faith with DAO contributors. Aave Labs was professional and supported increasing our budget to $5m to retain us. However, we are leaving because the engagement no longer reflects how we believe risk should be managed.”

Source: Omer Goldberg

Aave Labs CEO Stani Kulechov said that Chaos didn’t depart on bad terms, but claimed that Chaos pitched a proposal seeking to become the sole risk provider and thus force out other partners — a compromise Aave wasn’t willing to accept.

Chaos played a key role in Aave’s back-end infrastructure, from pricing loans and managing risk in the Aave V2 and V3 markets since November 2022, during which Aave’s total value locked rose fivefold to $26 billion.

Risk has been a major talking point in the Aave community after a user lost $50 million in a trade while interacting with Aave’s interface on March 12. The following week, Aave said it would introduce an “Aave Shield” protection feature to deter users from high-risk trades.

Advertisement

As for Chaos’ departure, Goldberg said there became an increasing misalignment over how the parties thought risk should be managed. He noted that some Aave contributors had left, raising its workload, while also arguing that Aave V4’s expanded functionality introduced additional operational and legal risks that fell on Chaos’ shoulders.

“While Aave Labs is optimistic about a swift migration to V4, history suggests these transitions take months and even years,” Goldberg said. “Until V4 fully absorbs V3’s markets and liquidity, both systems need to be operated and managed simultaneously. The workload during the transition doesn’t halve. It doubles.”

Weighing the risk of a protocol failure, Goldberg said, “There is no regulatory framework, no safe harbor, and no settled law that answers the question of what a risk manager or curator owes when a protocol fails. If things work, the work is invisible. If things break, the blame is not.”

As such, “We are walking away from a $5 million engagement,” Goldberg said.

Advertisement

Chaos wanted Aave to boot LlamaRisk, Chainlink: Kulechov

Aave Labs CEO Stani Kulechov told a slightly different story, stating that Chaos wanted to be the sole risk manager and use its price oracles instead of Chainlink’s.

Following that request would have forced Aave to push out its other risk protocol partner, LlamaRisk, and thus abandon its two-layer economic risk model.

Related: DeFi lender Aave launches on OKX’s Ethereum L2, X Layer

Kulechov added Aave was unwilling to integrate Chaos-built price oracles, citing Aave’s “track record” with Chainlink’s services, which its “users are currently more comfortable with at scale.”

Advertisement

He also said Chaos was already “exploring winding down its risk consultancy services,” and that Aave had offered to double its payment to $5 million to retain them.

Cointelegraph reached out to Chaos Labs for comment.

Kulechov noted that Chaos’ departure hasn’t disrupted the Aave protocol, its smart contracts, token listings or network integrations.

Moving forward, Aave said it “will work closely with LlamaRisk to ensure a smooth transition” and maintain its two-layer economic risk model. 

Advertisement
Source: LlamaRisk

Chaos’ departure comes amid a protocol-wide feud over how much funding and revenue control Aave Labs should receive versus Aave’s decentralized autonomous organization.

Despite the internal issues, Aave crossed the $1 trillion mark in cumulative lending volume in late February, marking a first in the DeFi industry.

Magazine: Animoca teams up with Ava Labs, Shrapnel on Steam: Web3 Gamer