A sharp reversal in Bitcoin’s price has blown a hole through one of its highest‑profile corporate backers. After topping $120,000 in October 2025, the cryptocurrency plunged through a series of thresholds and traded around $66,457 in mid‑February 2026, wiping out more than 23% of its value since the start of the year. The fallout has been particularly brutal for MicroStrategy, the Nasdaq‑listed software and investment firm that transformed itself into a corporate Bitcoin accumulator, which reported a $12.4 billion net loss for the fourth quarter of 2025.
MicroStrategy’s loss was driven largely by mark‑to‑market accounting: the company disclosed about $17.4 billion of unrealised fair‑value losses on its Bitcoin holdings. The firm’s balance sheet shows stakes of roughly 713,502 BTC at a total purchase cost of $54.26 billion and an average acquisition price of $76,052 per coin. Management nonetheless bought another 1,142 BTC in early February at an average near $78,000, raising its disclosed holding to 714,644 coins even as the market punished its shares.
What once looked like a virtuous cycle — rising Bitcoin prices lifting MicroStrategy’s net asset value, which supported equity issuance and further purchases — has reversed. The company’s market net asset value multiple (mNAV) compressed from rich, multi‑turn premiums in the bull market to about 1.09x, effectively pricing the stock at a near‑one‑for‑one valuation with its Bitcoin hoard. MicroStrategy’s shares have tumbled roughly 72% from their peak, and convertible bonds and other debt exposures now loom large on the capital structure.
Executives have begun to drop earlier rhetoric. Founder Michael Saylor, long a vocal proponent of an uncompromising “buy and hold” strategy, conceded on the company’s earnings call that selling Bitcoin is “also an option.” Management remained confident that reserves could cover convertible debt even under a hypothetical 90% Bitcoin collapse, but warned that extreme scenarios would require debt restructuring and other contingency measures.
MicroStrategy is not the only actor altering behaviour. Publicly listed miners and institutional holders have begun to sell or reallocate inventory to shore up liquidity. Cango disclosed the sale of 4,451 BTC to repay a Bitcoin‑backed loan; Marathon transferred 1,318 BTC onto an institutional platform for treasury or structured use. On‑chain data show a decline in coins held by addresses owning 10–10,000 BTC, with those wallets offloading some 81,000 BTC over an eight‑day window to February 6.
The market implications are broader than the fortunes of a single company. The latest sell‑off has tested the long‑standing narrative of Bitcoin as "digital gold" and a safe haven. Instead, the coin’s price action over the last year has become highly correlated with high‑beta technology equities — a correlation that reached about 0.8 in the second half of 2025 — suggesting that Bitcoin is trading more like a leveraged risk asset than a portfolio diversifier.
That shift matters because it changes how institutions and retail investors treat Bitcoin during stress. When liquidity is scarce or risk sentiment sours, large holders who financed purchases with equity issuance, convertible debt or collateralised loans may be forced to sell into falling markets, aggravating price declines and creating feedback loops of forced deleveraging. The immediate consequence is greater volatility and lower risk tolerance among potential corporate backers, which in turn dampens demand for future speculative leverage and could slow the next leg of institutional adoption.
For policymakers and markets, the episode is a reminder that the institutionalisation of crypto has concentrated new forms of systemic risk. Firms that used their corporate balance sheets to warehouse volatile digital assets have altered the transmission channels between crypto markets, public equities and credit markets. If more leveraged corporate holders are forced into sales or restructurings, contagion could spread to lenders, structured product holders and secondary trading venues. Investors and regulators will be watching whether this price shock prompts tighter risk controls, disclosure rules or limits on the use of corporate capital to acquire speculative assets.