Strategy Warns Bitcoin Investors of a 93% Crash
In its Bitcoin guide, Strategy mainly emphasizes custody, leverage, and liquidation risks. That stands out because the company itself holds 845,050 BTC and recently bought more.
Key Takeaways
- Strategy published a Bitcoin guide warning investors about steep losses from custody mistakes, leverage, liquidation, and other risks.
- The company cites a historic Bitcoin drop of 93.6% in 2011 and its worst annual return of minus 83.6%.
- Strategy held 845,050 BTC on September 7, just above its average cost basis of $75,412 per coin.
Strategy, the company formerly known as MicroStrategy, has published a Bitcoin guide warning investors about steep losses. The guide focuses more on risks like custody mistakes, position sizing, and liquidation than on the upside of Bitcoin. That stands out because Strategy itself still leans heavily on its own BTC position.
Crash From Bitcoin History
In the guide, Strategy points to the biggest drop in Bitcoin’s history. In 2011, the price fell from about $31 (€27) to $2 (€1.73), a drop of 93.6%. The company also cites a worst one-year return of minus 83.6%. The message is clear: even if you get Bitcoin’s long-term direction right, you can still lose money in the short term.
Strategy says an investor can be right about Bitcoin’s price going up and still take a loss because of leverage, option expiration, an unfavorable capital structure, business risks, counterparty failure, high costs, or forced liquidation. Executive chairman Michael Saylor shared the guide over the weekend.
Why This Feels Awkward Now
The warning carries extra weight because Strategy itself is deep in Bitcoin. According to the latest filings, the company held 845,050 BTC on September 7, at an average cost of $75,412 (€65,100) per coin. That is about 4.0% of the maximum supply of 21 million BTC. With Bitcoin trading around $76,729 (€66,200), the company was only just above its average purchase price.
The timing is also sensitive because Strategy recently bought again. The company resumed purchases on August 31 and paid an average of $80,318 (€69,300) for 4,603 BTC. That new buy is now underwater. At the same time, MSTR shares closed at $130.97 (€113) on September 12, giving the company a market value of $46.17 billion (€39.8 billion).
Investors Also Read the Product Story
The guide is not just a risk document, but also a kind of product overview. In it, Strategy lists the common stock and preferred stock of a BTC treasury company as investment options. The company also openly says it benefits from higher Bitcoin prices. For European crypto followers, that shows how closely treasury strategies, corporate finance, and BTC risks are now tied together.
Other bitcoin treasury companies also faced criticism over their capital structure in recent days; for example, Metaplanet reduced dilution after shareholder protests.
