Strategy has told investors that Bitcoin would have to collapse to around $8,000 before its crypto holdings no longer cover the company’s net debt, even as paper losses continue to deepen.

The Michael Saylor-led firm made the disclosure in investor materials released alongside its fourth-quarter results on Feb. 5.

At the time of the filing, Strategy said its Bitcoin (BTC) holdings were worth $59.7 billion at a reference price of $84,000, about 10 times compared with net debt of about $6 billion.

With Bitcoin now trading near $63,800, the value of those holdings has fallen to roughly $45.4 billion, as per Saylor Tracker data, down about $10 billion from the company’s average purchase cost.

Debt coverage and balance sheet position

Strategy said its Bitcoin would fail to cover net debt only in what it described as an “extreme scenario” involving a drop to $8,000, a level last seen in early 2020. The company added that its Bitcoin is unencumbered and not pledged as collateral, which limits the risk of forced selling even during sharp market declines.

As of Feb. 1, 2026, Strategy held 713,502 BTC, acquired at a total cost of $54.26 billion, or $76,052 per coin. The firm also reported a 22.8% Bitcoin yield for fiscal year 2025, reflecting gains from capital raising and reinvestment strategies.

During 2025, Strategy raised $25.3 billion in capital, making it the largest U.S. equity issuer for a second straight year. It also completed five preferred stock offerings, raising $5.5 billion, and expanded its digital credit program, STRC, to $3.4 billion.

“We raised $25.3 billion of capital in 2025 to advance our Bitcoin treasury strategy,” said president and CEO Phong Le. “In 2026, we remain focused on expanding STRC to generate amplification and drive growth in Bitcoin Per Share.”

Chief financial officer Andrew Kang said the company’s capital structure is stronger than in previous cycles, citing its $2.25 billion reserve fund, which covers more than two years of dividend and interest payments.

Michael Saylor described Strategy’s balance sheet as a “digital fortress,” built around its Bitcoin holdings and digital credit platform.

Losses, valuation, and sector-wide pressure

Strategy’s confidence in its debt coverage comes as losses linked to Bitcoin volatility continue to weigh on financial results.

Due to unrealized losses on digital assets under fair value accounting, the company reported an operating loss of $17.4 billion for the fourth quarter of 2025. Common shareholders incurred a net loss of $12.6 billion, or $42.93 per diluted share.

With Bitcoin trading in the low $60,000 range, Strategy’s holdings are now valued at about $45.4 billion, well below their $54.26 billion acquisition cost. Since late 2025, as prices fell and selling pressure mounted on cryptocurrency markets, that gap has grown. 

At the moment, the company’s diluted multiple to net asset value, or mNAV, is about 0.85x. mNAV measures how the market values a firm’s equity relative to the net value of its assets, mainly its Bitcoin holdings, after accounting for debt. A ratio below 1 means the stock is trading at a discount to the underlying asset value.

Pressure is also building across the wider crypto treasury sector. Data from Artemis shows that unrealized losses among crypto accumulation firms have surpassed $25 billion. None of those firms has generated profits that exceed acquisition costs.

Some analysts view Strategy’s $8,000 threshold as a theoretical floor rather than a realistic risk. Others note that prolonged weakness below $60,000 could test investor confidence, raise re-financing costs, and limit the company’s ability to raise new capital on favorable terms.