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.