Strategy formerly known as MicroStrategy’s big bet on Bitcoin (BTC) is facing a tough test. The company, which has aggressively added Bitcoin to its treasury, is now seeing its paper profits shrink. As Bitcoin struggles to break past key resistance levels, Strategy’s unrealized gains have fallen below $9 billion. Its total Bitcoin holdings are now worth less than before, raising concerns about the sustainability of its investment approach. Bitcoin’s Volatility Impacts Strategy Inc’s Holdings Since 2020, the Nasdaq-listed company has aggressively added the leading crypto asset to its treasury, expecting its value to rise over time. It purchased the asset at different price points, including near all-time highs (ATH). However, the recent market downturn has pressured the company’s holdings. With Bitcoin now trading below $84,000, Strategy’s recent purchase has yet to yield expected gains . This comes as many raise concerns about the firm’s approach of using new stock offerings to buy more Bitcoin. A bearish Bitcoin price means Strategy’s total portfolio is worth less, even though it still holds the same number of Bitcoin. If prices stay down for too long, investors may question whether the company’s aggressive buying strategy is still right. Bitcoin Struggles Against Key Resistance Bitcoin has increased from its lower price trajectory but can not break past $87,000. This level has become a strong resistance point, preventing the digital currency from reaching its past price peaks. A downward trendline also keeps the asset in check, making it harder for the price to rise. Even though Bitcoin has shown some recovery, the lack of a strong upward push means Strategy’s holdings are still under pressure. Experts believe if Bitcoin’s price continues to struggle, it could take longer for the company’s investments to return to higher profits. Meanwhile, a well-known angel investor, Jason Calacanis, asserted that Bitcoin will be replaced in the digital market. This has sparked a heated debate in the crypto community. Will Strategy’s Plan Work in the Long Run? Strategy has built its investment plan on the belief that Bitcoin will continue to grow in value over time. However, short-term price swings can make it difficult to adhere to this approach. Many worry that the company may reconsider its buying strategy if Bitcoin remains below key resistance levels for too long. On the bright side, some analysts believe Bitcoin will eventually recover and move higher, benefiting the Virginia-based software company’s long-term holdings. On the flip side, if prices stay low or drop further, the company may need to rethink how much Bitcoin it buys and consider the timing. All eyes are on Bitcoin’s next move, as it will determine whether Strategy’s investment pays off or continues to struggle. The post Bitcoin’s Price Drop Shrinks Strategy Paper Profits appeared first on TheCoinrise.com .
