Bitcoin Price Drops Below $71K Leaving Strategy With $3.8B Unrealized Loss

TLDR

• Strategy now holds 713,502 BTC bought at $76K each, totaling $54.3B in cost.
• Bitcoin’s price fell to $72.6K, deepening 2026’s crypto sell-off.
• MSTR stock has dropped 72% since November 2024, down 15% in 2026 alone.
• Analyst cuts MSTR price target from $474 to $185 while maintaining “buy” rating.

Strategy is reporting $3.8 billion in unrealized losses on its Bitcoin reserves as the cryptocurrency dipped below $71,000 on February 3. The firm holds 713,502 BTC, purchased for approximately $54.3 billion at an average of $76,052 per coin.

The decline in Bitcoin’s price has hit Strategy’s valuation and pushed its stock (NASDAQ: MSTR) into deeper losses. MSTR shares fell 3% to $129 on Wednesday and slipped further in after-hours trading. The stock is now down 72% from its record high in November 2024 and has fallen 15% since January 2026.

The sell-off occurred on Chairman Michael Saylor’s birthday and coincided with $777 million in crypto market liquidations within 24 hours, mostly from long positions. Bitcoin has now declined about 19% year-to-date, reflecting a reversal of momentum from its early 2025 peak.

Analyst Lowers Strategy Price Target Amid Crypto Volatility

Investor confidence in Strategy was further shaken after Canaccord Genuity’s Joseph Vafi revised his price target on the firm’s stock. On February 4, Vafi cut the target from $474 to $185, citing ongoing market weakness. Despite the adjustment, the analyst maintained a “buy” rating and noted the target still implies potential upside from recent levels.

At the time of reporting, MSTR shares are down 19% in 2026 and 64% year-over-year. Vafi commented that Bitcoin is “undergoing an identity crisis,” behaving more like a speculative risk asset than a long-term store of value. He noted that forced liquidations and reduced liquidity are affecting Bitcoin’s stability.

The upcoming earnings report, expected after markets close on February 5, is unlikely to change much for Strategy. The firm’s financial outlook is closely tied to Bitcoin’s performance, which continues to drive stock price movements.

Strategy Maintains Bitcoin Holding Policy Despite Price Pressure

Despite market turbulence, Michael Saylor reaffirmed his long-term Bitcoin strategy on social media. In a post shared on February 3, he outlined “The Rules of Bitcoin”: Buy Bitcoin and never sell it. Strategy has not sold any of its Bitcoin since its first purchase in August 2020.

Saylor’s statement comes as Strategy faces increasing scrutiny due to its aggressive Bitcoin accumulation. The company has positioned itself as the largest corporate holder of the digital asset and continues to buy through market cycles.

The firm has structured its treasury to manage volatility, including its preferred dividends, which remain manageable. However, the shrinking gap between its BTC holdings and stock price premium raises concern among institutional investors.

Bitcoin Diverges From Gold as Safe-Haven Narrative Weakens

The recent crypto downturn has exposed Bitcoin’s limited role as a hedge asset. Unlike gold, which rose in 2025 due to geopolitical risks and macro uncertainty, Bitcoin struggled to gain traction during the same period.

Analysts and traders now point to Bitcoin’s correlation with broader risk markets and liquidity flows. The October 2025 flash crash underscored this, as selling pressure accelerated as leveraged positions were liquidated across exchanges.

With Bitcoin trading around $72,600 and Strategy’s average BTC cost remaining near $76,000, the firm’s portfolio remains underwater. The coming weeks will be critical as investors weigh continued macro pressures against long-term crypto adoption trends.

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