Analysis: MSTR down 78% from peak, its BTC holding cost is higher than spot price

June 25 news, CryptoQuant analyst Axel Adler Jr. stated that Strategy's preferred stock MSTR has fallen 78% from its peak, and Bitcoin has fallen 51% from its peak.

As of June 22, Strategy holds 847,363 BTC with a total cost of $64.1B, an average holding cost of $75,651. The current BTC price has fallen below this cost line for the first time since the 2022 bear market.

Currently, MSTR's decline relative to BTC has reached about 28%, near the upper bound of the historical range, but MSTR's price has not yet touched the extreme bottom area of the 89% retracement seen in 2022.

At the same time, Strategy has reduced its weekly BTC purchases by about 2/3, and of the $335.5 million raised through stock issuance, less than 11% was used to buy BTC, with the remaining funds transferred to dollar reserves.

In addition, Strategy also sold 32 BTC at the end of May, its first sale since 2022. This series of actions indicates that Strategy's purchasing strategy has clearly shifted to a defensive posture.

Adler pointed out that the main risk currently is BTC persistently staying below Strategy's holding cost line of $75,000, which would compress MSTR's premium space and block the company's ability to raise funds through ATM (at-the-market) stock issuance.

However, Strategy's debt structure is almost entirely convertible into convertible bonds. This type of debt does not require margin calls, and there is no risk of forced liquidation due to price declines in the short term.

In summary, Strategy has shifted from selling stocks to starting to sell some BTC, indicating a loss of marginal buyers rather than cascading liquidations.

But if this pattern of "selling coins to pay interest" takes shape, its marginal impact on the market will far exceed that of a one-time reduction operation.

#Strategy