The Largest Bitcoin Buyer Is Underwater - This May Surprise You

The Crypto Advisor is your trusted resource for navigating the world of cryptocurrency. Each week, we deliver a clear and concise update on the latest developments in crypto, straight to your inbox. This is more than just a newsletter; it’s an essential resource for forward-thinking advisors focused on maintaining a competitive edge. We’re excited to support your journey in adapting to and thriving in the new age of financial services. There’s a reality in crypto right now that sounds wrong the first time you hear it. The largest corporate Bitcoin buyer in the world - running one of the most transparent capital accumulation programs ever executed in public markets - is currently underwater on a position built over nearly five years of steady buying. Not because of leverage. Not because of forced selling. Not because of a broken thesis. Just because of how capital actually gets deployed into Bitcoin over time. What our team has consistently noticed through conversations about this is that when observers anchor to when the company first began buying, this outcome genuinely feels almost impossible. What we hear over and over is this: “A program that started in 2020, when Bitcoin was still trading in five figures, should intuitively be sitting on massive embedded gains today.” And our response, time and time again, is that balance sheets don’t care about first entries - and Bitcoin acquisition is no exception to that reality. Balance sheets care about where the majority of dollars were actually deployed - not when conviction first appeared - and in crypto, those two moments often occur in completely different market environments. To explain how this happens, we have to stop thinking about when the program started and start looking at how the position was actually built. Because in Bitcoin - and especially at institutional scale - positions are almost never built in a straight line. Strategy began accumulating Bitcoin in 2020, when the asset was still trading in what now feels like a completely different regime. The very first purchase was on August 10, 2020, when the company acquired 21,454 BTC at an average price of $11,652 per Bitcoin. The following purchase the next month was 16,796 BTC at an average price of $10,419, marking their cheapest Bitcoin acquisition ever. Later that year, on December 21, 2020, the company added another 29,646 BTC at an average price of $21,925, bringing total holdings to more than 70,000 BTC before Bitcoin had even entered its 2021 peak cycle. Just two months later, on February 19, 2021, Strategy added another 19,452 BTC at an average price of $52,765, showing the company was still deploying meaningful capital even as Bitcoin entered a dramatically higher price territory. At the time, these were enormous, conviction-driven allocations that helped define the company’s entire capital strategy. But they were not the majority of the position. By late 2024 and into 2025, single purchases were rivaling - and in some cases exceeding - the company’s entire early-cycle exposure. The tape shows purchases such as roughly 55,000 BTC in the high-$90,000 range, followed by another roughly 50,000 BTC in the high-$80,000s, along with repeated five-figure BTC additions throughout 2025, often between roughly $85,000 and $105,000, with some purchases occurring above $110,000. This is where the majority of dollars were deployed. Across the full program, Strategy has accumulated more than 700,000 BTC at a blended average cost basis in the mid-$70,000 range. That blended number reflects both early purchases in the $10,000 to $20,000 range and later purchases in the $80,000 to $110,000 range, combined into a single dollar-weighted outcome. This is why a program that began when Bitcoin was a five-figure asset can still be underwater later in the cycle. And it’s also our explanation for how the everyday investor can end up temporarily in the red even after years of consistent accumulation. Which raises a more useful question: how should this buying actually be classified? To answer that, it helps to step back and look at how the capital behind this program was actually created. Strategy did not begin this process sitting on tens of billions of dollars in excess cash waiting to be deployed into Bitcoin on a fixed schedule. Instead, the company built the capital alongside the program itself, raising funds through a combination of convertible note issuances, at-the-market equity offerings, and repeated trips to both debt and equity markets to support continued accumulation. Each of those capital raises required real-world constraints to align. Debt investors had to be comfortable lending against a balance sheet that was becoming Bitcoin-heavy rapidly, while equity investors had to be willing to absorb new share issuance. At the same time, the company had to maintain credibility with both markets while continuing to operate and grow its core business. As a result, capital availability expanded over time - not in a straight line, and certainly not on a fixed monthly schedule. That reality shows up clearly in the purchase history. Early in the program, purchases were large relative to the company’s size at the time, but modest compared to what would come later. As capital raises became larger and more frequent, the size of individual Bitcoin purchases increased alongside them, eventually reaching single transactions in the tens of thousands of BTC, often at significantly higher price levels than the initial accumulation phase. So was this dollar-cost averaging, or was it a series of lump-sum deployments? From a timeline perspective, it resembles dollar-cost averaging, with capital entering the market repeatedly across multiple years and market regimes. But from a dollar-weighted perspective, the program looks very different. In practice, it more closely resembles scaled accumulation - averaging exposure across time while increasing deployment size as capital access, market validation, and internal conviction expand. The cleanest way to think about it is this: Strategy averaged in over time, but scaled in across size. And in many ways, that is much closer to how capital is deployed in the real world than most theoretical models assume. To add another layer to this story, in light of Bitcoin’s recent drawdown, Strategy reported a roughly $12.6 billion net loss for the quarter, driven largely by unrealized losses on its Bitcoin holdings. While these losses are accounting-driven and do not reflect forced selling or realized capital destruction, they can still influence how debt and equity markets evaluate future capital raises. In practical terms, if market conditions tighten or if investor appetite for funding additional Bitcoin purchases weakens, we expect that the company’s ability to continue accumulating at the prior scale would likely be constrained. That dynamic is important because it reinforces a broader reality: large-scale accumulation programs are not just functions of conviction - they are functions of capital availability. Regardless of near-term volatility and their underwater position, Strategy is now roughly 70% of the way toward a one million Bitcoin position - a scale of sovereign-level accumulation that no corporate competitor comes remotely close to rivaling. It already stands as one of the most consequential capital allocation decisions in modern financial history, and one that will almost certainly be studied, debated, and dissected for generations. And on a smaller level, you - the reader - have a decision to make. This isn’t about whether you can replicate Strategy’s scale - almost nobody can. It’s about whether you can control the variables that actually determine long-term outcomes in markets like this: portfolio sizing, capital deployment, and how you manage exposure through volatility. Because while few investors will ever have institutional-level access to capital, every investor is subject to the same realities of market cycl…