#StrategyBitcoinPositionTurnsRed StrategyBitcoinPositionTurnsRed Institutional BTC Faces a Stress Test

Bitcoin has slipped into a critical zone where even the strongest institutional holders are feeling pressure. With BTC trading between $74,500 and $75,500, Strategy’s average acquisition cost of $76,052 has moved the position into unrealized loss territory. Holding approximately 713,502 BTC with a total cost basis near $54.2B, the market value has now fallen below the acquisition floor, marking a notable psychological and strategic moment.
The immediate trigger behind BTC falling below Strategy’s cost stems from a macro shock driven by the Federal Reserve narrative. The nomination of Kevin Warsh as Fed Chair on January 30 reignited fears of a more hawkish monetary stance. A stronger U.S. dollar followed, pushing markets into risk-off mode and applying broad pressure across Bitcoin and other risk assets.
Geopolitical tension failed to provide the usual hedge narrative. Despite rising U.S.–Iran uncertainty, Bitcoin did not perform as digital gold. Instead, investors sought liquidity, selling liquid assets to raise cash, which caused BTC to decline alongside equities rather than decouple from them.
Leverage amplified the downside. Approximately $2.5B in leveraged crypto positions were liquidated over the weekend, triggering mechanical sell-offs that accelerated price weakness. This cascade added momentum to the decline and pushed BTC below key institutional reference levels.
From a strategic standpoint, Strategy’s position remains structurally intact. There is no margin call risk since the BTC holdings are not pledged, keeping insolvency concerns minimal. However, the equity premium that once enabled aggressive capital raises has largely evaporated, with Strategy shares trading roughly 70% below their peak, limiting flexibility to fund additional Bitcoin purchases through equity issuance.
Institutional conviction is now being visibly tested. Spot Bitcoin ETF outflows suggest that even long-duration institutional strategies are facing pressure as volatility persists. While long-term theses remain unchanged, patience is being strained across professional portfolios.
February 3, 2026, may stand as a defining stress test for institutional Bitcoin holders. The core question is no longer how deep the drawdown may go, but how long large-scale holders can sustain positions below cost. The coming weeks will reveal whether conviction holds firm—or begins to fracture under prolonged pressure.