This week, after Bitcoin's price fell below the critical support of $70,000, the extreme bullish Bitcoin treasury company Strategy found itself in the spotlight: its holdings of 713,502 BTC (valued at approximately $4.966 billion) have overall entered the unrealized loss zone, with a floating loss exceeding $4.6 billion. With an average acquisition cost as high as $76,052 per coin and a total acquisition cost of about $54.26 billion, the market price has clearly inverted against the cost line, amplifying Strategy's holding cost into a psychological coordinate for the entire market. The aggressive approach of institutions betting their balance sheets on a single high-volatility asset is now facing a reality check—when extreme bullishness meets severe pullbacks, the Bitcoin "corporate treasury model" is undergoing a systemic stress test.
710,000 Bitcoins Trapped: Floating Losses Amplified into Market Coordinates
● Data Structure and Loss Range: According to public data, Strategy currently holds 713,502 BTC, with a market value of approximately $4.966 billion at current prices, corresponding to a total acquisition cost of about $54.26 billion, indicating an overall holding in the $4.6–4.8 billion unrealized loss range. Based on an average acquisition cost of $76,052 per coin, as long as the current price falls below $70,000, Strategy's entire portfolio will reverse from a previous massive floating profit to a floating loss position that must be acknowledged on the financial statements.
● Timeline of Floating Profit Turning into Floating Loss: Since the beginning of this year, after Bitcoin reached an all-time high, it was once far above Strategy's average cost line, making this company appear to be "winning big on paper." However, as the price retreated from its highs and fell below $70,000 this week, the loss of key support became an emotional turning point—the market realized that Strategy's cost zone was no longer a "safety cushion," but rather a pressure line being continuously tested. The switch from floating profit to floating loss is not a momentary event at a single price point, but rather a process of repeatedly testing the cost band, pushing this line into the center of all traders' attention.
● Cost Line Becomes Emotional Anchor: Institutions like TechFlow and Foresight have repeatedly pointed out that Strategy's acquisition cost has become an "important psychological threshold for the market." The reason is that its holding size is sufficient to influence narratives; when the price is above the cost line, this line is interpreted as a "bullish defense line"; once it falls below, the market amplifies the association of "can the whale hold on?" The cost line is no longer just a number in accounting but is interpreted as a price anchor that both bulls and bears monitor closely, with every fluctuation around this level being interpreted within Strategy's coordinate system.
From Hero to Target: How Saylor Was Pushed to the Forefront
● Aggressive Treasury Path and Concentrated Risk: Since Michael Saylor pushed Strategy to massively shift the company's balance sheet towards Bitcoin, this originally relatively traditional company has gradually been transformed into a "treasury company" with BTC as its core reserve asset. The radical aspect of this path lies in the company's choice to continuously increase its holdings over many years, raising the average cost, rather than viewing Bitcoin as a marginal allocation or tactical position, thus equating the price trajectory of a single asset almost entirely with the company's market value and shareholder wealth, greatly amplifying concentrated risk.
● Flagbearer and Myth During Price Uptrends: During the phase when Bitcoin was rising and breaking new highs, Strategy's concentrated holdings were seen as a bull market flagbearer. The market was eager to tell the story of "traditional listed companies betting on Bitcoin and achieving huge paper gains," with Saylor packaged as a pioneer daring to confront mainstream financial skepticism. This narrative further fed back into the price, with bullish sentiment finding real support in the "corporate treasury + long-term holding" model, and Strategy's existence itself was seen as a symbol of price increases.
● Target Imagination During Downtrends: However, as prices fell and floating losses expanded, the narrative quickly reversed. Concentrated holdings were reinterpreted as a potential source of selling pressure during downtrends; although there is no concrete evidence pointing to Strategy's intention to reduce holdings, bears instinctively view the cost zone around $76,052 as a shorting target, betting on a price drop to create greater psychological pressure. Meanwhile, bulls still regard Strategy as a "market support banner," believing that as long as the company does not sell, the market will have enough confidence to wait for the next upward cycle, with both sides' game unfolding around the same set of holding data.
Where is the Institutional Pressure Threshold: When Do Floating Losses Turn from Numbers to Action
● Decision Framework and Accounting Pressure: For large institutions, unrealized losses are merely a set of accounting numbers in the short term, but in the context of publicly listed companies, these numbers are transmitted through financial reports to shareholder expectations, valuation models, and even credit ratings. Management must find a balance between "long-term faith" and "short-term reporting pressure": should they choose to hold their positions and emphasize long-term logic to shareholders, or should they reduce holdings within a certain range to smooth out volatility? While the specifics of Strategy's internal risk control thresholds are unknown to outsiders, it is certain that the larger and longer the floating loss, the higher the explanation costs faced by management in board meetings and regulatory inquiries.
● Overall Market Pullback and Tolerance: According to data from Golden Finance, the total market capitalization of the crypto market has pulled back about 19% this year, with a scale of approximately $570 billion evaporated. In this macro context, Strategy's floating losses are not an isolated phenomenon but a reflection of the synchronized squeeze on the entire institutional crypto exposure. The issue is that different institutions have varying risk tolerances: traditional funds may be forced to rebalance when a certain percentage of pullback occurs, while companies like Strategy, which incorporate BTC as a core asset on their balance sheets, publicly claim "long-term holding, not afraid of volatility," but face a capital market tolerance test that is far more direct than ordinary investment institutions.
● Misalignment with Traditional Asset Management: In traditional finance, large institutions typically manage risk based on clear asset allocation ratios and rebalancing rules; when a particular asset class experiences significant volatility, they will correct through hedging or adjusting positions. However, in Strategy's model, Bitcoin is placed in an environment lacking mature hedging tools and experiencing 24-hour volatility, yet there is no equally detailed rebalancing mechanism to refer to. Heavily investing in a single high-volatility asset means that the company faces almost only two extreme options—"continue to hold" or "cut losses"—when confronted with severe market fluctuations, exposing structural vulnerabilities compared to traditional portfolio management.
Liquidity and Liquidation Imagination: Can One Company's Reduction Trigger a Chain Reaction?
● Holding Size and Potential Impact: Strategy's holding of 713,502 BTC is of a super-sized level compared to the total circulating supply of Bitcoin and the average daily trading volume on global exchanges. Theoretically, even if it chooses to reduce holdings in phases, the market would anticipate that such a scale of selling pressure could exert downward traction on prices. Even if no actual reduction occurs, as long as the hypothesis of "what if they sell" exists, the liquidity imagination itself will be preemptively factored into price fluctuations and trading strategy designs.
● Expectations of Forced Reductions and Preemptive Selling: From a market psychology perspective, the question of "will they be forced to reduce holdings" is more damaging than "are they really reducing holdings." Once some traders believe that a certain whale might trigger risk control within a certain range, they will choose to sell before the imagined sell-off to avoid potential liquidation. This behavior creates additional downward pressure on prices, which in turn reinforces the market narrative that "the whale is more likely to be forced to reduce holdings," forming a self-fulfilling expectation cycle.
● Comparative Mapping of Different Institutional Rhythms: While Strategy faces floating losses, the actions of other institutions are also shaping the market volatility structure. Reports show that DDC Enterprise has increased its BTC holdings for four consecutive weeks, currently holding 1,888 BTC at an average cost of about $86,868, significantly higher than the current price, representing another type of high-level buying institution; meanwhile, Nakamoto related addresses have transferred 933 BTC (approximately $65 million) to new wallets. These varying rhythms of inflow and outflow starkly contrast with Strategy's long-term heavy holdings: some are "buying the dip," some are silently migrating, while the one with the largest and most high-profile holdings is being scrutinized under a magnifying glass for every fluctuation in its accounts.
Crypto Treasuries Colliding with Wall Street Risk Control: Old Rules Being Forced to Rewrite
● Unconventional Use of Balance Sheets: In traditional corporate financial management, core reserve assets on the balance sheet are often low-volatility categories such as cash, short-term government bonds, or high-rated bonds, used to ensure liquidity and capital stability. Strategy's choice to place Bitcoin in this position essentially embeds a high-volatility, round-the-clock trading asset that has not yet been fully integrated into mainstream accounting and regulatory frameworks directly into the company's core safety net. This practice is almost unprecedented in traditional financial textbooks and has tightly bound "corporate value" to "crypto market sentiment."
● Structural Mismatch from a Risk Control Perspective: The characteristics of crypto assets—severe price volatility, 24/7 trading, high sensitivity to macro and micro events, and relatively limited mature hedging channels—naturally mismatch with Wall Street's refined risk management systems. Traditional risk control tools are designed based on predictable trading periods, relatively stable correlation structures, and a rich derivatives market, but when new assets like Bitcoin are directly incorporated into large on-balance sheet positions, existing VaR models, stress test scenarios, and liquidity reserve logic face awkward situations that are difficult to align with real-world volatility.
● Rule Rewriting in the Institutionalization Wave: Strategy is just an extreme example, but not an isolated case. As more and more companies, funds, and family offices incorporate Bitcoin into their on-balance sheet or strategic asset allocations, questions like "how to present this in financial statements," "how to depict this in risk models," and "how to explain this to regulators and shareholders" are forcing old rules to adjust. Future corporate finance textbooks may have to add a chapter: when companies treat crypto assets as strategic reserves, how traditional capital structures and risk constraint clauses can adapt to participate in the long-term value game of this new asset without sacrificing safety margins.
Floating Losses Are Just the Beginning: Who Will Write the Next Round of the Script
Strategy's current floating loss exceeds $4.6 billion, merely laying bare a long-standing contradiction: on one side is an extreme heavy position based on faith, and on the other is a cold market pricing language based on numbers and volatility. As long as Bitcoin continues to operate in a high-volatility range, this conflict will not disappear but will be repeatedly amplified in every significant surge and deep pullback. Strategy's financial statements have become the most direct carrier of this tug-of-war, with numbers updating daily and faith being questioned daily.
In the coming months, several key observation points will determine the direction of the story: first, whether Bitcoin can regain a stable range above the average cost line of $76,052, allowing Strategy's massive floating losses to revert back to paper profits; second, whether management will continue to uphold the public narrative of "not selling coins," or whether they will be forced to adjust positions and rhetoric once pressure accumulates to a certain critical point. Each price retest and breakthrough of the cost line will be viewed by the market as a practical test of this "Bitcoin treasury model."
Ultimately, the significance of this stress test goes beyond the profits and losses of a single company; it addresses a grander question for the entire market: when enterprises and institutions treat Bitcoin as a strategic chip on their balance sheets, is this a delayed payout gamble, or a new asset allocation paradigm that can be truly absorbed and replicated by mainstream finance? If Strategy can navigate through cycles of volatility while maintaining trust in the capital markets, the Bitcoin treasury narrative has the opportunity to evolve from a "gambler's myth" into a case that can be included in institutional asset allocation manuals; conversely, this high-profile experiment may also be archived as a costly lesson in risk management.
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