Bitcoin Price Decline Creates Paper Losses for Strategy Fund

Strategy fund’s recent Bitcoin investments are now underwater as the cryptocurrency’s price slipped below the company’s average acquisition cost. With Bitcoin trading at $68.86K as of mid-February 2026, the fund faces mounting paper losses on its position—a stark reminder of crypto market volatility and the risks inherent in large institutional accumulation strategies.

Expanding Holdings Despite Market Headwinds

According to data analysis platform NS3.AI, Strategy has aggressively added to its Bitcoin holdings, accumulating approximately 900 additional coins at an average price of $88,000 per coin. The company financed this expansion through issuing common stock rather than liquidating preferred shares, revealing a deliberate capital management approach. This strategy signals confidence in Bitcoin’s long-term value, even as short-term price pressure creates paper losses on the newer acquisitions.

Financial Resilience Amid Crypto Downturns

Despite the paper losses and declining stock valuation, Strategy maintains substantial liquidity reserves. The firm has even increased its preferred shares dividend rate, demonstrating financial flexibility and commitment to shareholders. This dual approach—aggressive Bitcoin accumulation paired with shareholder dividends—suggests the company is not deterred by current price weakness.

Market Implications of Institutional Pressure

Strategy’s situation exemplifies a broader challenge facing institutions heavily exposed to Bitcoin. When price corrections occur, paper losses accumulate rapidly, yet seasoned investors often view such downturns as strategic entry points rather than exit signals. The $88,000 average purchase price now represents a painful overpayment relative to current levels, but the company’s maintained cash position indicates it’s prepared for extended volatility while maintaining long-term conviction in digital assets.