The recent downturn in Bitcoin’s BTC/USD value has significantly affected the unrealized gains of Strategy Inc. MSTR, which has made substantial investments in the cryptocurrency.

What Happened: Strategy’s paper profits have taken a hit and slipped below $9 billion as Bitcoin struggles to break through key resistance levels, as per a report by The Tokenpost. The company’s total Bitcoin holdings are now worth less than before, leading to questions about the viability of its investment approach. In November, the firm gained over $10 billion in profit from its Bitcoin investments.

Since 2020, Strategy has been proactively adding Bitcoin to its treasury, buying the asset at various price levels, including near record highs. However, the company’s holdings have come under pressure due to the recent market downturn. With Bitcoin currently trading below $84,000, Strategy’s recent acquisitions have not produced the anticipated returns.

This situation has raised concerns about the company’s method of using new stock offerings to purchase more Bitcoin. Although Bitcoin has shown some recovery, its inability to surpass the critical resistance level of $87,000 keeps Strategy’s holdings under pressure.

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Why It Matters: The recent dip in Bitcoin’s price comes ahead of the Federal Reserve’s decision on interest rates. Leading cryptocurrencies experienced a drop as investors anticipated the Fed’s decision with Bitcoin witnessing a volatile Friday, fluctuating between $85,000 and $82,000. This context adds to the pressure on Strategy’s Bitcoin holdings and underscores the need for a potential shift in its investment strategy.

Despite the downturn, Strategy’s co-founder Michael Saylor stays bullish on Bitcoin. In his latest speech at the Bitcoin Policy Institute, Saylor stated that the cryptocurrency is critical to the prosperity of the U.S. and the nation can become the global Bitcoin superpower.

In another post on X, Saylor said, “Bitcoin is an Orange Dwarf— the brightest object in the financial system— growing stronger, hotter, and denser as it attracts capital.”

Meanwhile, cryptocurrency analyst Ali Martinez referred to $81,400 as a significant test for Bitcoin, stating that if the price stays above this level, its upward momentum will persist.

MSTR holds a momentum rating of 99.98% and a growth rating of 7.27%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.