MicroStrategy's Bitcoin Bet Tested as BTC Slips Below Average Cost

MicroStrategy (MSTR-US) faces mounting scrutiny as Bitcoin briefly fell below its average acquisition cost of $76,052 on February 2, 2026, challenging the sustainability of its "equity-for-Bitcoin" strategy. The company holds over 713,000 BTC, valued at approximately $53.2 billion, against a total investment of $54.2 billion, resulting in a paper loss. Despite the dip, MicroStrategy remains financially stable with no margin calls or forced sales, backed by a $2.25 billion cash buffer from recent equity offerings. However, its core strategy—issuing shares when stock trades above Bitcoin’s book value per share—has weakened as its share price has dropped ~70% from peaks, erasing the equity premium needed to fund further purchases without excessive dilution. The firm bought $75.3 million in Bitcoin between January 26 and February 1. With MSTR’s market cap now nearly equal to its Bitcoin holdings, any BTC volatility directly amplifies investor sentiment toward CEO Michael Saylor’s high-risk bet. Analysts warn that without a sustained Bitcoin rally or renewed equity demand, the model’s viability may falter.