Strategy Inc, a Key Digital Asset Treasury Stock, Shaken by Bitcoin Plunge [Crypto Briefing]

[Financial News] As the price of Bitcoin has fallen to the mid-$74,000 range, concerns are mounting in the market over the leveraged strategy of Strategy Inc, which serves as a benchmark for domestic and overseas Digital Asset Treasury (DAT) firms. According to Investing.com and the virtual asset industry on the 3rd (local time), Strategy Inc’s share price closed at $139.63, down 6.73% from the previous day, slipping below the conversion prices of all its outstanding convertible bonds (CBs). The stock has already dropped more than 8% since the beginning of the year.
The latest plunge was triggered by pressure on the crypto market from the combination of the hawkish stance of Kevin Warsh, who has been nominated as the next chair of the Federal Reserve System (the Fed), and a strong U.S. dollar. If Bitcoin continues to trade below Strategy Inc’s average purchase price of around $76,000, there is growing concern that redemption demands from CB investors could emerge as a source of potential selling pressure in the market.
Strategy Inc is estimated to hold about 712,600 Bitcoins, roughly twice the holdings of the Federal Government of the United States. As the Bitcoin price has fallen below the company’s average acquisition cost, Strategy Inc is believed to have entered a zone of unrealized losses on the order of about $900 million on its books. In particular, the current share price of $139.63 is below the conversion prices of CBs issued in 2024–2025, which range from a low of $149.77 to a high of $672.40, making it difficult to expect investors to exercise their conversion rights.
Another risk that market experts point to for Strategy Inc is its debt profile, which is heavily concentrated around 2028. The early redemption options on the company’s large-scale CB issuances are clustered in the 2027–2028 period.
If investors demand early repayment and Strategy Inc’s cash flow is insufficient, the company will likely have to sell some of its Bitcoin holdings to raise funds. According to an analysis by iM Securities, if repayment pressure of about $6.4 billion materializes in 2028, Strategy Inc may need to put roughly 71,000 Bitcoins on the market, assuming a market price of $90,000 per coin. This would represent about 20–30% of the global Bitcoin market’s average daily trading volume and could act as a catalyst for a vicious cycle of sharp price declines.
To spread out this repayment pressure, Strategy Inc has moved to issue preferred shares with a double-digit dividend yield. The preferred stock is structured so that dividends can be paid in shares instead of cash, which reduces short-term cash outflows but increases the risk of diluting the value of existing shareholders’ stakes.
Tiger Research Inc. commented, "Strategy Inc is a massive leveraged structure that is effectively a bet on rising Bitcoin prices," adding, "As of last year, there was still room down to the static bankruptcy threshold of $23,000, but whether the company can successfully refinance in 2028 will ultimately determine the fate of this strategy."

elikim@fnnews.com Kim Mi-hee Reporter