MSTR Stock Falls 4.5%, Schiff Warns Saylor of Deeper Losses

Key Insights

• Bitcoin price slipped below Michael Saylor’s average purchase price and pushed the firm into about $900 million in unrealized losses.
• Critics like Peter Schiff warn of deeper losses ahead, while inverse ETFs betting against MSTR stock have surged.
• Despite market pressure, Michael Saylor reiterated that Strategy is buying Bitcoin with a multi-decade horizon.

MicroStrategy (MSTR) shares dropped another 4.5% on February 3, extending the pain for investors. The continued correction highlights persistent pressure on the stock with no immediate signs of relief.

The MSTR stock is now trading at $133, and could be on its way to $100 as anticipated by analysts.

Gold buff Peter Schiff warned that losses could get even bigger over the next five years. At the same time, he suggested a BTC price crash.

MSTR Stock Extends Losses In Market

The MSTR stock seeks to find no bottom and has extended its losses to 65% just over the past six months. Investors have been pushed to the edge as the company’s $54 billion Bitcoin holdings have also moved underwater.

Bitcoin critic Peter Schiff called out Michael Saylor over his Bitcoin accumulation strategy. He said that the $54 billion investment over the past 5 years has cost Strategy investors.

Schiff said that the losses could increase in the next five years, while predicting BTC’s downfall. In his latest post on X platform, Schiff wrote:

On the other hand, anti-Strategy ETFs have benefited the most from the MSTR stock rout. The Nasdaq-listed GraniteShares 2x Short MSTR Daily ETF (MSDD) has delivered a strong performance since its launch on Jan. 10, 2025.

On Tuesday, Feb. 3, MSDD price surged to $114, extending its year-to-date gains to 13.5%. Over the past year, since its launch, this ETF has given investors 275% gains. A similar product, the Defiance Daily Target 2x Short MSTR ETF (SMST), also advanced to an 11-month high of $113 on Tuesday.

What’s Next for MSTR Stock as Strategy BTC Holdings Go Underwater?

Bitcoin price has slipped under $75,000, below Michael Saylor’s average purchase price. As a result, the MSTR stock is now sitting on $900 million worth of unrealized losses.

The move has reignited speculation over whether the company could face bankruptcy or be forced to sell its Bitcoin holdings.

But market expert Bull Theory noted that a dip below Strategy’s average cost does not automatically translate into liquidation risk. Strategy has previously endured similar scenarios.

In the prior market cycle, the firm’s average Bitcoin cost was near $30,000, before prices fell to around $16,000. Thus, BTC was trading more than 45% of its average cost basis.

The analyst noted that Strategy’s Bitcoin is not pledged as collateral. Thus, there are no margin calls tied to the BTC price movement.

The company’s debt is largely unsecured, with most maturities scheduled between 2028 and 2030. Total debt stands at roughly $8.24 billion. At the same time, its Bitcoin holdings are still valued at about $53.5 billion at current prices.

Strategy Debt Maturity Schedule | Source: Bull Theory, X

In addition, Strategy has set aside approximately 2.5 years of cash reserves to cover interest and dividend obligations. This further reduces the chance of the company liquidating its BTC in near term.

Michael Saylor Remains Confident on Bitcoin Bet

Amid all the market chatter, Strategy Chairman Michael Saylor remains confident as ever. During his recent CNBC interview, Saylor dismissed recent BTC price volatility as a test of conviction rather than a reason to reconsider holdings.

Source: X

Speaking about the Strategy’s approach, Saylor said the company is buying Bitcoin with the intention of holding it “for 100 years.”

He also spoke about the previous market cycles. Saylor also noted that the sharp drop from roughly $66,000 to $16,000 served to flush out short-term traders and “non-believers.”

But he added that during the depths of the downturn, Strategy was prepared to hold its position even in a worst-case scenario. “When it was $16,000, we were ready to ride it to zero,” he said.

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