When the price of Bitcoin (BTC 0.38%) was skyrocketing to $126,000 last year, the demand for Bitcoin treasury companies appeared to be insatiable. New Bitcoin treasury companies were launching seemingly every week.
Companies such as Strategy (MSTR 2.18%), the largest corporate holder of Bitcoin in the world, were leveraged bets on the future of Bitcoin, and their future looked very rosy indeed.
But what about now, when the price of Bitcoin is down 45% during the past four months? Should investors still be putting their money into Bitcoin treasury companies such as Strategy?
How to value companies like Strategy
As a Bitcoin treasury company, the sole purpose of Strategy is to accumulate as much Bitcoin as it can, as cheaply as it can, and as quickly as it can. And that's exactly what it has managed to do during the past five years. According to the latest Motley Fool crypto research, as of the first week of February, the company held 713,502 bitcoins on its balance sheet, valued at about $50 billion at today's prices.
On a regular basis, Strategy adds even more Bitcoin to its balance sheet. Just a week after the new Motley Fool research came out, the company bought another 1,142 bitcoins at a price of $90 million. As a result, the company now owns 714,644 bitcoins, or more than 3% of all Bitcoin in circulation.
Image source: Getty Images.
But here's the problem: The company's Bitcoin holdings are currently underwater. The cost basis of the company's Bitcoin is $76,056 each, while the current price is less than $70,000. When Strategy last reported earnings, it reported a staggering $12.4 billion loss for Q4 2025, based on an impairment write-down on its Bitcoin holdings.
NASDAQ: MSTR
Key Data Points
Not surprisingly, the price of Strategy stock has been nosediving. It's now down about 60% during the past 12 months, and recently hit an 18-month low of $104. That's making it increasingly difficult to keep the company's crypto flywheel going, given that new Bitcoin purchases are usually funded by issuing Strategy stock.
Buy, sell, or hold?
Against this backdrop, it's hard to make the case for buying Strategy these days. You're better off just buying Bitcoin directly and waiting for its price to return back to the $100,000 level. After all, the current market cap of Strategy ($40 billion) is now less than the value of its Bitcoin holdings ($50 billion).
CRYPTO: BTC
Key Data Points
All Bitcoin treasury companies are in trouble right now, and it's hard to see how any investor would be willing to pay a premium to hold its stock. In fact, just about every company identified by the Motley Fool as a top corporate holder of Bitcoin -- including four Bitcoin mining companies and two other Bitcoin treasury companies -- would be a clear pass for now. Strategy is a sell in 2026 until the price of Bitcoin recovers significantly.
