Strategy’s Unrealized Bitcoin Loss Tops $13 Billion, Exceeding Dogecoin Market Cap
Summary
- A report said Strategy, the world’s largest corporate Bitcoin holder, is sitting on more than $13 billion in unrealized losses on its Bitcoin investment, a figure that exceeds Dogecoin’s market capitalization.
- Strategy holds about 847,363 Bitcoin with an average purchase price in the $75,000 range, meaning a drop in Bitcoin’s price would translate into a large valuation loss on its income statement.
- Further declines in Bitcoin, or continued weakness in its stock and preferred share prices, could put more strain on Strategy’s funding structure and make additional capital raising more difficult, the report said.
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Strategy, the world’s largest corporate Bitcoin holder, has amassed more than $13 billion in unrealized losses on its Bitcoin investment.
CoinDesk reported on June 26 that Strategy’s unrealized loss on its Bitcoin holdings is estimated to exceed $13 billion. The company currently holds about 847,363 Bitcoin. Its average purchase price is in the mid-$75,000 range per token.
That unrealized loss is larger than the market capitalization of some major cryptocurrencies, including Dogecoin. Dogecoin’s market value stood at about $12.77 billion as of June 26, according to CoinMarketCap. CoinDesk said the figure shows that a single company’s leveraged Bitcoin bet has wiped out more value than the real-world utility of several crypto projects.
The accounting treatment is another concern. Strategy records valuation losses from declines in Bitcoin prices on its income statement. As a result, the company could report a sizable loss in its next quarterly earnings.
Concerns are also mounting over Strategy’s funding structure. Further declines in Bitcoin, or continued weakness in the company’s common stock and preferred shares, could make additional fundraising more difficult, CoinDesk reported.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul