Written by Glendon, Techub News
Last night, after Bitcoin broke below the key psychological level of $70,000, its price plummeted again this morning, plunging to $60,000, marking its lowest level since September 2024. Compared to its all-time high of $126,000 last October, this drop represents over 52%, a near halving. Bitcoin subsequently experienced a sharp V-shaped recovery, rebounding to around $64,000. Within less than 12 hours, Bitcoin's decline exceeded 14%, triggering widespread panic in the market. The cryptocurrency fear and greed index further declined from 12 yesterday to 9, indicating an increasingly intense atmosphere of extreme fear.
The plunge in Bitcoin quickly triggered a chain reaction across the entire crypto market, with various sectors experiencing a collective "plummet." Popular sectors such as Layer 2 and Meme saw declines generally exceeding 10%. CoinAnk data shows that, as of the time of writing, in the past 24 hours, total liquidations across the network reached $2.2 billion, with long positions exceeding $1.9 billion, affecting over 450,000 individuals. Bitcoin long positions alone accounted for nearly $1 billion of these liquidations.
Amid this market crash, Ethereum continued its downward spiral, eventually falling below $1,800. This forced Trend Research, an investment firm that had just begun to recover, to transfer another 19,000 ETH to Binance this morning to repay loans and mitigate liquidation risks. Meanwhile, the unrealized losses of Ethereum treasury company BitMine surged to over $8.1 billion. As the pioneer of the DAT market and the company with the largest Bitcoin holdings, Strategy's situation is equally precarious.
Back on February 1st, when Bitcoin fell below $76,000, it broke through a psychological barrier long considered Strategy's cost line, attracting widespread attention and discussion within the industry. Now, with the Bitcoin crash, Strategy has suffered a double blow. Today, its stock, MSTR, plummeted $22.1 from $129 to $106.99, a single-day drop of over 17%. Prior to this, its stock price had fallen for seven consecutive months, and compared to its all-time high of approximately $540 in November 2024, its current decline is about 80%. Barring unforeseen circumstances, MSTR will continue to fall this month, setting an embarrassing record of eight consecutive months of decline.
On February 1st, Strategy disclosed that it had spent approximately $75.3 million to purchase 855 BTC, bringing its total Bitcoin holdings to 713,502. According to official information, Strategy's total acquisition cost is currently approximately $54.26 billion, with an average cost of approximately $76,052 per Bitcoin. Based on current prices, Strategy's total Bitcoin holdings are worth approximately $45.66 billion, with unrealized losses reaching approximately $8.6 billion.
Faced with a plummeting stock price and huge unrealized losses, the market has begun to question Strategy’s “issuing shares to buy cryptocurrencies” model, which it relies on for survival. At the same time, it has begun to speculate whether it will respond to the crisis by selling Bitcoin like Trend Research, or continue to increase its Bitcoin holdings against the trend.
Has Strategy run out of funding?
Strategy, as a Bitcoin treasury company, differs fundamentally from Trend Research, a highly leveraged long-only investment firm. Its core business model is not simple price speculation, but a meticulously planned financial engineering project. For a long time, the company's financing model has relied on a key metric: the market capitalization-to-net-value ratio (mNAV), which is the ratio of a company's market capitalization to the net value of its Bitcoin holdings. When mNAV is greater than 1, it means the market is giving the company's stock a premium. Strategy can then raise funds by issuing stocks or bonds at a price higher than the net value of its Bitcoin holdings, and use the proceeds to buy more Bitcoin, creating a flywheel effect of "financing—buying Bitcoin—market capitalization growth."
However, the continued decline in Bitcoin and MSTR stock prices over the past few months has put significant pressure on Strategy's mNAV ratio, causing it to repeatedly fall below the key level of 1. As of this writing, Strategy's market capitalization is approximately $30.744 billion, and its net mNAV has dropped to approximately 0.67. This figure not only directly reflects that the company's market capitalization is significantly lower than the value of its Bitcoin holdings, but also means that Strategy may currently find it difficult to raise funds to purchase Bitcoin through a public offering of common stock.
Last November, Strategy CEO Phong Le commented on this metric, stating that if the mNAV ratio remained below 1 and the ability to acquire new capital continued to deteriorate, selling Bitcoin would be considered a "last resort." He also emphasized that this was not a long-term policy shift or a proactive sell-off plan, but merely a "financial decision" to be made in the event of extreme market and capital environment deterioration.
So, has Strategy reached a point where it is unable to raise funds?
On February 1st, Strategy founder Michael Saylor announced that the February dividend yield of Strategy's perpetual preferred stock, STRC, would be increased by 25 basis points to 11.25%. The dividend yield is adjusted monthly. Strategy can raise more funds to increase its Bitcoin holdings by issuing shares through an ATM (Auction-by-Touch) mechanism linked to the product.
Strategy's Q4 2025 earnings report, released today, also clearly conveyed a positive signal: Strategy still has the ability to continuously obtain funds through common stock issuance plans and at-the-market (ATM) issuance plans for various preferred stocks (such as STRK, STRF, STRC, etc.), and its financing channels have not yet dried up.
The financial report shows that in the three months ending December 31, 2025, the company generated approximately $5.6 billion in total proceeds through various ATM program transactions; from January 1 to February 1, it generated an additional approximately $3.9 billion in total proceeds. As of February 1, approximately $8.1 billion remained available for fundraising under the common stock offering program. Furthermore, approximately $20.3 billion, $1.6 billion, $3.6 billion, and $4 billion remained available for issuance under the STRK ATM, STRF ATM, STRC ATM, and STRD ATM programs, respectively. This demonstrates that Strategy's structured financing design allows it to operate independently of a single market or instrument; even if the financing efficiency decreases due to the mNAV discount on common stock, it can still attract specific investors through high-yield preferred stock.
Taking the STRK ATM program as an example, although the price of Bitcoin fell to $60,000, significantly reducing Strategy's fundraising efficiency and putting pressure on market sentiment, the remaining $20.3 billion in funding for the program is still available and will not automatically expire due to Bitcoin price fluctuations. However, it's important to clarify that these ATM programs do not raise all funding at once, but rather in batches and gradually. Typically, the company will issue small amounts of shares daily or weekly based on market acceptance, stock price fluctuations, and funding needs to avoid impacting the market. Therefore, as long as the stock price doesn't drop to zero, fundraising can continue, allowing Strategy to consistently and stably complete its fundraising plans over months to years.
Analysts believe that a core logic at play is that Strategy's business model doesn't rely on "selling stocks to raise money to buy cryptocurrencies." Instead, it leverages the long-term appreciation potential of Bitcoin to attract capital in the form of high-dividend preferred shares, which are then used to purchase Bitcoin. Therefore, as long as Bitcoin remains considered "digital gold" and institutions are still willing to pay a premium for "Bitcoin exposure," Strategy's financing cycle will not easily break down.
We will continue to implement the "Bitcoin-based" strategic approach.
On the crucial issue of increasing or decreasing its Bitcoin holdings, Strategy's stance is remarkably firm. Despite the sharp drop in Bitcoin prices in the fourth quarter, which resulted in an operating loss of $17.4 billion and a net loss of $12.4 billion for the company, it purchased 41,002 BTC in January 2026 alone, demonstrating that its long-term confidence in Bitcoin has not been shaken by market fluctuations.
Phong Le stated that Strategy actively pursued its Bitcoin Treasury strategy in 2025, successfully raising $25.3 billion. Meanwhile, its flagship digital lending facility, STRC, grew to $3.4 billion. In 2026, Strategy will continue to focus on expanding STRC to increase Bitcoin per share (BPS) earnings for MSTR common equity investors and drive its continued growth.
Notably, Strategy emphasized in its financial report that as of February 1st, the company had $2.25 billion in US dollar cash reserves. This amount is sufficient to cover preferred stock dividends and interest payments on outstanding debt for more than two and a half years, eliminating the need to raise funds by selling Bitcoin. As an effective risk mitigation measure, Strategy established a dedicated US dollar reserve in early December last year specifically for dividend payments. This fund originated from proceeds from the sale of Class A common stock according to the company's market offering plan. Strategy's CFO, Andrew Kang, stated that this cash reserve further strengthens Strategy's creditworthiness, making its capital structure more robust and resilient than ever before.
Last night, Michael Saylor once again wrote "HODL" on X and emphasized in the financial report that Strategy has built a digital fortress with 713,500 Bitcoins at its core and is transforming into digital credit. This strategic move is highly consistent with their vision of holding Bitcoin indefinitely.
It is clear from the above data and viewpoints that although Strategy is currently facing a serious paper loss on its Bitcoin holdings, the company still has sufficient liquidity to support its daily operations and potential strategy to continue increasing its Bitcoin holdings.
In fact, for Strategy, selling Bitcoin could signify a strategic failure of its core business model. Holding Bitcoin is the fundamental purpose of Strategy's existence, not merely an investment tool. Choosing to sell Bitcoin would directly undermine the narrative of its "digital gold" reserves, triggering market skepticism about its business model and potentially leading to a more severe crisis of confidence and a drop in stock price, creating a vicious cycle.
During Strategy's Q4 financial results webinar today, Phong Le stated bluntly that in an extremely unfavorable scenario, a 90% drop in Bitcoin's price to $8,000, followed by a five- to six-year period, would be the only real threat to repaying their convertible debt. At that point, they would be unable to repay the convertible bonds with their Bitcoin reserves, and would then consider restructuring, issuing additional stock, or issuing additional debt. Meanwhile, Andrew Kang also clearly stated that they will continue to execute their established strategy even amidst market volatility.
In summary, despite significant short-term financial pressure, Strategy's cash flow remains ample. Furthermore, Strategy is well-prepared to continue its "Bitcoin-based" strategic approach. This extreme focus on Bitcoin is both a gamble on market cycles and a test of its narrative capabilities. Whether it can build a sufficient trust buffer through new businesses such as "digital lending" to avoid selling its coins and collapsing its business model when Bitcoin prices remain below its holding cost for an extended period will be its most critical survival issue in the coming years, and will be the focus of market attention.
