MSTR Stock Crash Deepens as Strategy Hits Historic $10.8B Unrealized Loss

Strategy (NASDAQ: MSTR) has dropped by 26% since June 1, when it announced that it had sold 32 BTC for around $2.4 million. The sale started a vicious cycle. Bitcoin has lost $10,000 since June 1 as traders sold because of panic around the biggest Bitcoin buyer becoming a seller. Bitcoin going down is bad for MSTR stock because its stash of 803,746 coins has reached a historic unrealized loss of $10.8 billion, and critics are now warning of a potential lawsuit.

MSTR Stock Crash Deepens Amid Bitcoin Losses

Strategy shares opened the week of June 1 trading at $148 and reached a high of $153 during the day. Two days later, the stock is trading at $127, with this week’s crash pushing it 77% below its all-time high of $473 seen in November 2024.

Crypto stocks tend to go down when the crypto market is dropping, like it is doing now, but MSTR’s 26% drop in the last three days is the highest compared to Coinbase (COIN) that is down 19%, and Circle (CRCL) that is down 16%.

Strategy is the biggest corporate holder of Bitcoin, and that means shareholders will be concerned when Bitcoin moves from $73,000 to $63,000 in just three days. Because of this drop in BTC price, Strategy would take a loss of $9.7 billion if it sold all the 803,746 Bitcoin it holds today.

This unrealized loss earlier reached $10.8 billion, which is the highest Strategy has ever carried since it started buying BTC in August 2020.

Previously, unrealized losses did not concern Strategy shareholders because it was a net buyer until the recent sale of 32 BTC made it likely that this loss might actually be realized and affect earnings.

Michael Saylor Says AI is Behind Crash as Critics Sound Alarm

Strategy’s executive Chairman has taken to X to state that the recent drop in BTC price that has made MSTR stock crash is not an impairment, but it is because capital is flowing from Bitcoin to AI, and this is also causing outflows from ETFs.

“Capital markets are funding the AI buildout at historic scale: ~$400B over 6 months. Bitcoin ETFs have seen ~$4B of outflows since May 14, pressuring $BTC. This is a capital rotation,” Saylor said.

But Bitcoin critic Peter Schiff notes that Bitcoin dropping alongside Strategy shares is not the biggest problem facing Strategy, but STRC is. He says that if BTC continues to unravel and Strategy ends the dividend on STRC, it will trigger a “flood of lawsuits” against the company.

Saylor remains unmoved by this criticism, and CoinGape reports he hinted at another Bitcoin buy on June 3 after BTC fell below $70,000.

MSTR Stock Nears Key Support Amid Intense Selling

The 26% drop in MSTR stock in the last three days has taken it below the 200-week SMA level of $156, and bears are now testing to see whether the support at $117 is going to hold.

The volume bars that have been red for four straight days confirm that the ongoing drop is because of intense selling.

The RSI has a reading of 36, showing that the momentum is favoring bears, and MSTR might move lower to this support at $117 until sellers reach a point of exhaustion, where the RSI reading will be at 30.

MSTR faces an obstacle at the 200-week EMA if it starts to recover. It had moved above this EMA on April 13 and closed three straight weeks above it before Bitcoin topped out at $82,000 on the week of May 11, and MSTR stock has been moving downhill since then.