Strategy Inc. Shares Test Investor Resolve as Key Bitcoin Threshold Breached

Investors in Strategy Inc. are now confronting a scenario long viewed with apprehension. Over the weekend, the price of Bitcoin declined below the company's average acquisition cost, placing its most significant balance sheet asset in an unrealized loss position. This development intensifies the spotlight on a stock that has already depreciated considerably over the past year, prompting a crucial assessment of the firm's underlying financial health.

As of Sunday, Bitcoin traded near $75,500, dipping below Strategy Inc.'s reported average purchase price of approximately $76,037. With the company's treasury holding roughly 712,647 Bitcoin, this price differential translates into a substantial paper loss. The pressure on sentiment is palpable, given the firm's operational model is now deeply intertwined with the cryptocurrency's market performance.

Liquidity and Debt Profile Offer a Buffer

Despite this setback, market observers point to mitigating factors that currently stave off any immediate liquidity crisis. Strategy Inc. maintains a robust cash reserve of $2.25 billion, earmarked for covering operational expenses and dividend distributions.

Perhaps more critical is the structure of the company's debt. While convertible notes totaling $8.2 billion remain on the balance sheet, they do not present a near-term refinancing risk. The earliest redemption options are not exercisable until the third quarter of 2027. This timeline provides management with significant breathing room, eliminating any forced requirement to liquidate Bitcoin holdings at depressed prices to satisfy creditors.

Should investors sell immediately? Or is it worth buying Strategy?

Analysts Spot a Contrarian Opportunity Amid the Sell-Off

The equity itself has endured a severe correction, with shares currently trading at €119.20. This price reflects a staggering decline of over 63% across the preceding twelve-month period. However, some analysts interpret the steep sell-off as a potential entry point.

Cantor Fitzgerald resumed coverage of Strategy Inc. in late January, assigning the stock an "Overweight" rating alongside a $213 price target. This endorsement suggests that certain market experts perceive underlying value and potential for recovery beyond the current period of weakness.

All eyes now turn to Thursday, February 5, 2026. On this date, the management team is scheduled to release quarterly results and is expected to outline its long-term strategy for navigating the inherent volatility of the cryptocurrency sector.