SKN | Strategy Swings From a $13 Billion Bitcoin Loss to a $1.4 Billion Gain as BTC Rebounds

Strategy has moved from a roughly $13 billion unrealized loss on its Bitcoin treasury in July to an estimated $1.4 billion gain, highlighting how quickly the company’s balance-sheet exposure can change when BTC prices move sharply. The turnaround follows a five-day Bitcoin rally that pushed the cryptocurrency above Strategy’s average acquisition price of $75,385 and renewed attention on the risks and financial leverage embedded in the company’s Bitcoin-centric treasury model.

Bitcoin Rebound Puts Strategy Back Above Its Cost Basis

Strategy held 840,447 BTC as of Aug. 16, with an aggregate acquisition cost of approximately $63.36 billion and an average purchase price of $75,385 per Bitcoin. At a BTC price near $77,000, those holdings were valued at roughly $64.97 billion, leaving the company with an unrealized gain of about $1.4 billion, or 2.4%.

The shift is particularly notable because Bitcoin traded near $58,000 in July, when Strategy’s position was estimated to be about $13 billion below its acquisition cost. BTC remains well below its October 2025 record near $126,000, underscoring how sensitive Strategy’s reported asset value remains to relatively modest changes in the cryptocurrency’s price.

A Rally Fueled by Short Covering and Market Repricing

Bitcoin’s latest advance has been unusually rapid. BTC climbed about 7.9% in 24 hours to roughly $77,137 on Aug. 21 and was up approximately 23.2% over seven days, reaching an intraday high near $79,320. The move triggered approximately $1.5 billion in liquidations across the crypto market, including about $1.21 billion in short positions, creating an additional source of upward pressure.

For Strategy, the effect is amplified because Bitcoin represents the dominant component of its balance sheet. The company’s shares responded accordingly, rising roughly 10% in Friday premarket trading to about $120, their highest level in two months. The equity reaction demonstrates how investors often treat MSTR as a leveraged proxy for Bitcoin exposure, although the company’s debt, preferred securities and financing structure create risks that differ materially from holding BTC directly.

Strategy Is Also Changing How It Funds Its Treasury

The turnaround comes alongside a significant change in Strategy’s capital-management approach. Since May, the company has sold 6,948 BTC for approximately $432.5 million, departing from the longstanding policy associated with Executive Chairman Michael Saylor of maintaining Bitcoin holdings without selling them. One recent transaction involved the sale of 1,690 BTC for $108.6 million, with the proceeds used to repurchase preferred stock.

Strategy subsequently paused Bitcoin sales and instead raised approximately $333.7 million through the sale of MSTR shares during the week ended Aug. 16. Of that amount, $132.2 million was used to repurchase STRC preferred stock, $52.4 million went toward preferred dividends and $149.1 million was added to the company’s dollar reserve, which reached approximately $4.8 billion.

That shift matters because Strategy’s Bitcoin exposure is increasingly intertwined with its broader financing strategy. Selling equity can provide liquidity without reducing BTC holdings, but it can also increase the number of shares outstanding and alter the economics for existing common shareholders. Conversely, selling Bitcoin reduces direct exposure to future price appreciation but can strengthen liquidity and help meet corporate obligations.

What Investors Should Watch Next

The key question is whether Bitcoin can remain above Strategy’s roughly $75,385 average acquisition price while the company manages its preferred-stock obligations and cash requirements. The recent rally has restored an unrealized gain, but the move also followed significant short liquidations, meaning some of the advance was driven by positioning rather than a fundamental change in Bitcoin demand.

Going forward, investors will likely focus on three variables: Bitcoin’s ability to sustain levels above Strategy’s cost basis, the company’s pace of MSTR equity issuance, and whether Strategy resumes accumulating BTC after strengthening its dollar reserve. The company’s balance sheet remains highly sensitive to crypto-market volatility, making the relationship between Bitcoin prices, financing conditions and treasury management central to the next phase of its strategy.