Bitcoin treasury companies are underwater again, but that’s the whole model

Bitcoin treasuries are designed to look uncomfortable in drawdowns, because the trade they’re running is simple: take a volatile asset, put it on a corporate balance sheet, and finance more of it through capital markets. When Bitcoin drops, the mark-to-market hit is the point, not the punchline.

The real question is whether the company can keep its funding machine running long enough for volatility to swing back the other way.

Bitcoin’s price of about $78,500 on Feb. 1 turns the conversation about unrealized losses into a stress test for everyone who bought closer to the cycle highs, and a reminder that early adopters still sit on large buffers even when headlines look ugly.

• Strategy holds 712,647 BTC at an average cost of about $76,037 per BTC, putting it roughly $1.76 billion in the green on paper.
• Metaplanet holds 35,102 BTC at $107,716, roughly $1.03 billion underwater.
• Trump Media holds 11,542 BTC at $118,529, roughly $462 million underwater.
• Tesla holds 11,509 BTC at $33,539, roughly $517 million in the green.
• Coinbase holds 14,548 BTC at $71,465, roughly $102 million in the green.

For companies where BitcoinTreasuries shows the balance but not the average cost, any “unrealized loss” math becomes an estimate.

Bullish, for example, is listed at 24,300 BTC with no cost basis. If you treat the August 31, 2025, close of $108,248 as a rough proxy for the period when late-cycle treasuries were building positions, that would imply something like $621 million of paper losses at today’s price, but that’s just a very rough and very pessimistic assumption.

American Bitcoin Corp is listed at 5,843 BTC with no disclosed average cost. If you anchor to the May 31, 2025, close of $104,654 as a proxy around its “held since” date, you get an estimated $128 million drawdown.

MARA is listed at 53,250 BTC with no disclosed average cost, which makes any full-position loss estimate speculative.

That discomfort is why the framing around “unrealized losses” keeps coming back. It takes a volatile treasury asset and forces it through a quarterly scoreboard. But that scoreboard is also what these companies chose when they decided to run Bitcoin as a balance-sheet strategy rather than a trade.

Paper losses are normal because volatility is the product

If a company wants Bitcoin’s upside, it has to accept Bitcoin’s downside in public. That is the trade-off for having an asset that can move tens of thousands of dollars inside a year. When the market’s weak, the paper losses grow fast, and they look even larger if the buyer came late.

Metaplanet is a good example of this because its disclosed average cost is still above the current price. At 35,102 BTC and $107,716 per coin, it’s carrying a large mark-to-market gap as Bitcoin sits near $78,500.

Trump Media shows the same pattern, with an even higher average cost per coin and a smaller stack. In both cases, the headline number can look like failure when the market is down, even though the strategy never promised smooth quarters.

Tesla and Coinbase can weather a drawdown with more ease because their average costs are far below today’s market price. That difference in entry point is often treated like luck, but it also describes a structural divide: early adopters get time, while late adopters need financing as their cushion.

Strategy sits somewhere in the middle. Its overall average cost is below the current spot price, so the base position is still positive. But its recent purchases have been happening at far higher levels than that average, which is why the company can be up on the lifetime stack while still adding fresh tranches that go underwater quickly.

That’s why unrealized losses aren’t the core risk here. The core risk is whether the company can keep financing purchases and servicing obligations through the downcycle without being forced to sell.

The real risk is the funding stack, not the red number

A Bitcoin treasury strategy is a funding strategy with a Bitcoin wrapper. Once you accept that, riding out volatility stops being a motivational line and becomes a balance-sheet problem.

Strategy is the clearest case because it has a steady cadence of buys. It reported 22,305 BTC purchased between Jan. 12 and Jan. 19, and disclosed another 2,932 BTC purchased between Jan. 20 and Jan. 25, bringing holdings to 712,647 BTC.

Those purchases are what’s keeping the market assured that the machine keeps running. That kind of confidence is valuable when price is up because it supports the story that the equity can be used as a bridge to more Bitcoin. But it becomes fragile when price is weak, because it shows the bridge is getting more and more expensive.

If the stock price falls faster than Bitcoin, dilution becomes heavier per unit of BTC acquired. If capital markets tighten, the cost of raising money climbs. If the equity trades at a discount to the underlying BTC value, issuing stock feels punitive and can feed a loop where each raise weakens the per-share claim.

That’s because what forces selling is a mismatch between cash needs and financing options, not the losses themselves. In theory, a company can sit on large paper losses indefinitely if it has time, liquidity, and no hard maturities that demand action at a bad moment.

However, a company’s paper losses can also be cornered if it has a near-term obligation that can’t be refinanced, or if it relied on a market premium that disappeared.

Miners complicate the picture because they can add BTC through production rather than purchases, but they still face the same funding problem through a different channel: operating costs.

For example, MARA is listed at 53,250 BTC, and it also disclosed a direct market purchase of 400 BTC last October.

If you treat that October price regime as representative of late-cycle buys, the paper loss on high-cost tranches can be large even if the company’s full stack has a much lower average cost from earlier mining and accumulation.

The point here isn’t to pin MARA to a single loss number. The point is that miners also end up managing timing risk when they choose to hold through a drawdown instead of selling to smooth cash flow.

For newer entrants to the Bitcoin treasury game, the same logic applies with fewer cushions.
Bullish is listed at 24,300 BTC and shows no public average cost on BitcoinTreasuries. If that stack was largely assembled around late-2025 price levels, the mark-to-market hit can be brutal at $78,500, but what matters is whether the company’s operating cash flows and financing runway can tolerate that hit.

“Ride it out” is a policy choice that shows up in the next buy

The best way to understand a company’s Bitcoin treasury strategy is to watch what happens when it gets the chance to buy while it’s underwater.

Metaplanet bought 4,279 BTC on Dec.30, 2025, and sits with an average cost above the Jan. 30 spot price. If it continues to buy into weakness, it’s choosing to widen exposure while the scoreboard is negative, betting that the long-duration payoff matters more than short-term optics.

If it slows down, it means it’s choosing to protect liquidity and reduce the chance that funding needs collide with price weakness. Neither choice is better; they’re just different risk budgets.

Trump Media sits in the same late-entry category on BitcoinTreasuries’ data, with a high average cost and a large unrealized loss at current prices.

The practical question is whether it treats Bitcoin as a long-duration treasury reserve that can be ignored through volatility, or as a market-facing strategy that has to be defended through continuous capital market support.

That’s almost completely opposite from Strategy, which keeps buying even when the market’s spiraling down, because stopping will most likely be seen as the machine breaking. That’s the hidden contract treasury firms sign with their investors: volatility is fine, but inconsistency is expensive.

Meanwhile, Tesla and Coinbase show how some companies remain virtually unaffected by a market that’s deep in the red.

When a company’s average cost sits below spot, drawdowns don’t produce the same existential narrative, even though Bitcoin is just as volatile for them as it is for everyone else. Those companies can afford to wait a little longer because the market isn’t asking them to explain why they bought the top.

Paper losses matter because they test whether the strategy was built for survival or for optics. A Bitcoin treasury strategy only fails in a drawdown when the company loses the ability to wait.

Everything else, including the red number, is just the cost of playing the game.