MicroStrategy Stock Drops 5% After Bitcoin Buy, Here’s Why

Despite a momentary uptick in Strategy’s stock performance this week, its shares dropped again on Tuesday, continuing its declining streak over the past months.

This comes after the company bought another $118 million in Bitcoin, signaling a lack of investor confidence in the aggressive accumulation playbook founder Michael Saylor has pioneered.

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MSTR Slides Despite Fresh Bitcoin Purchase

Strategy (formerly MicroStrategy) on Monday announced that it had acquired 1,287 Bitcoin, increasing its reserve to 673,783. 

Despite the purchase coming at a time when Bitcoin’s price briefly surged following the US-Venezuela conflict, the company’s shares failed to sustain momentum.

Peaking at $167.24, MSTR’s stock price soon fell to a low of $155 before resettling at $157. The inability to regain a foothold, even in relatively favorable market conditions, has revived questions regarding investor confidence and long-term sustainability.

It also comes at a time when Strategy’s overall performance has been steadily declining since mid-2025.

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Cash Reserves Fail to Ease Concerns

According to Bloomberg, Strategy suffered a $17.44 billion unrealized loss in the fourth quarter of last year. Sustained selling pressure caused its stock to decline nearly 50% throughout 2025.

The company has since established a cash reserve by selling common shares, recently increasing it by $62 million to $2.25 billion alongside its latest Bitcoin purchases. 

Nonetheless, investors remained concerned that Strategy would ultimately have to sell off some of its Bitcoin if its price were to dip even further. The concern is no longer rhetorical. 

In late November, CEO Phon Le acknowledged for the first time that the company could sell its holdings under specific crisis conditions. His announcement marked a significant departure from Saylor’s longstanding conviction to “never sell.”

As 2026 begins, the outlook remains challenging. 

Although Strategy found relief on Tuesday after the MSCI announced that it would not exclude digital asset treasuries from its index in February, the fate of Bitcoin’s price remains uncertain. 

If another sharp downturn occurs, Strategy will inevitably be affected. Moreover, continued increases in its Bitcoin exposure would likely amplify the impact and further erode investor confidence.