Crypto's Worst Day Since 2022 Crash

The Wall Street Journal reports Bitcoin Booster's $12 Billion Loss Headlines Crypto's Worst Day Since 2022 Crash

Bitcoin tumbled to $63,596.56 at 4 p.m. Eastern time, sliding 13% during its worst 24-hour trading period since June 2022. Minutes later, Michael Saylor's Strategy said crypto's late-2025 swoon had left the bitcoin-stockpiling company with a staggering paper loss in the fourth quarter.

Strategy's fourth-quarter net loss widened to $12.4 billion, or $42.93 a share, from $670.8 million, or $3.03 per share, a year earlier. In the most-recent period, the company recorded an unrealized fair-value loss of $17.4 billion on its digital assets, complying with accounting rules that require companies to value their holdings at current market prices.

Saylor, who co-founded the software company formerly known as MicroStrategy MSTR has spent the past six years transforming his business into a storehouse of bitcoin. He has issued stock and debt to raise billions of dollars for his crypto-buying spree, and by Feb. 1 held 713,502 bitcoins. Dozens of other public companies followed Saylor's lead, emboldened by a surge in crypto prices during the early months of the second Trump administration and the performance of Strategy's shares.

The selloff in bitcoin gained steam this past week, when crypto exchanges sold trader assets automatically because the value of their collateral has dropped too low. The token traded at $62,955 as of late Thursday afternoon. 

Bitcoin trades well below Strategy's average purchase price of $76,052, and investors fear a further slide might eventually force the company to sell their holdings.

Saylor has long implored investors to never sell their bitcoins. But he rattled the crypto market late last year by suggesting that Strategy could in fact shed some tokens or bitcoin-backed derivatives if its mNAV, or its enterprise value divided by the value of its crypto holdings, were to drop below one. Early on Thursday, though, Saylor took to X, the social-media platform, to write: "HODL," a reference to an inside joke that means: hold on to your bitcoin.

Strategy's mNAV stood at about 1.1 as of Thursday evening. The company has continued to buy bitcoin in recent weeks.

When the so-called mNAV drops below one, it means the company trades at a discount to its crypto holdings and may have difficulty selling shares to buy tokens. And to buy back stock, it might have to sell tokens. 

While Strategy is at the epicenter of the crypto selloff, the company itself faces no immediate consequences for bitcoin's decline, analysts said. 

The company has mostly relied on selling common and preferred shares to fund its bitcoin acquisitions. It has $8.2 billion in convertible, unsecured debt that matures between 2028 and 2032. Strategy has built up cash reserves of more than $2 billion to help ensure it can meet future dividend and debt-interest payments.