Bitcoin finance company is millions of dollars in the red, but strategy remains the same even at $78,000

Bitcoin Treasuries are designed to look unpleasant when drawdowns occur. This is because the transactions conducted by Bitcoin Treasuries are simple. It’s as simple as taking a volatile asset, putting it on a company’s balance sheet, and raising more money through the capital markets. When Bitcoin goes down, the point is the rally to the market, not the punch line.

The real question is whether the company can keep its fundraising machine running long enough for volatility to swing in the other direction.

Bitcoin’s price of around $78,500 on February 1 turned talk of unrealized losses into a stress test for anyone who bought near cycle highs, and a reminder that even if the headlines are ugly, early adopters are still sitting on a large buffer.

• strategy It holds 712,647 BTC with an average cost of approximately $76,037 per BTC. $1.76 billion It’s in green on the paper.
• metaplanet Holds 35,102 BTC at approximately $107,716 $1.03 billion Underwater.
• trump media Holds 11,542 BTC for approximately $118,529 $462 million Underwater.
• tesla Holds 11,509 BTC at approximately $33,539 $517 million In the green.
• coinbase Holds 14,548 BTC at approximately $71,465 $102 million In the green.

For companies where BitcoinTreasuries shows balances but not average costs, the “unrealized loss” calculation is an estimate.

For example, Bull is listed at 24,300 BTC with no cost basis. If we treat the August 31, 2025 closing price of $108,248 as a rough proxy for when late-cycle Treasuries were building positions, that would imply a paper loss of around $621 million at today’s prices, but this is a very rough and very pessimistic assumption.

American Bitcoin Corp is listed at 5,843 BTC and its average cost is not disclosed. If the closing price of $104,654 on May 31, 2025 were fixed around the “held since” date, there would be an estimated drawdown of $128 million.

MARA is listed at 53,250 BTC and the average cost is not disclosed, so full position loss estimates are speculative.

This discomfort is why the framework around “unrealized losses” keeps re-emerging. Capture volatile financial assets and force them into your 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 transaction.

Paper losses are normal because volatility is a product

If companies want the positive side of Bitcoin, they must publicly accept the negative side of Bitcoin. That’s the trade-off with having assets that can potentially move tens of thousands of dollars within a year. Paper losses increase rapidly when the market is down, and they appear to be even greater when buyers are delayed.

Metaplanet is a good example. This is because the average cost disclosed by Metaplanet is still higher than the current price. At 35,102 BTC and $107,716 per coin, there is a large market price gap with Bitcoin sitting around $78,500.

Trump Media shows the same pattern, with an even higher average cost per coin and smaller stacks. In either case, when the market is down, the headline numbers can look like a failure, even though the strategy didn’t promise a smooth quarter.

Tesla and Coinbase can more easily weather drawdowns because their average costs are well below today’s market prices. This difference in entry points is often treated as luck, but it also represents a structural divide. Early adopters get time, but late adopters need money as a cushion.

Strategy lies somewhere in between. The reference position remains positive as the overall average cost is below the current spot price. However, recent acquisitions have been made at a much higher level than that average, which is why the company is able to climb the lifetime stack while adding new tranches that quickly submerge.

That’s why unrealized losses are not the central risk here. The central risk is whether companies will be able to continue financing purchases and repaying debt through the downcycle without being forced to sell.

The real risk is the stack of funds, not the red numbers

A Bitcoin Treasury Strategy is a funding strategy using a Bitcoin wrapper. Once you accept that, weathering volatility ceases to be a motivation line and becomes a balance sheet issue.

Strategy is the clearest case because it has a steady pace of purchases. It reported that 22,305 BTC were purchased from January 12th to January 19th, and revealed that an additional 2,932 BTC was purchased from January 20th to January 25th, bringing its holdings to 712,647 BTC.

These purchases ensure the market that machines will continue to operate. This kind of confidence is valuable when prices are rising, as it supports the story that the stock can be used as a bridge to more Bitcoin. But when prices fall, the bridge becomes brittle. Because it shows that bridges are becoming more and more expensive.

If the stock price falls faster than Bitcoin, there will be greater dilution per unit of BTC acquired. Tight capital markets raise financing costs. If a stock is trading at a discount to its underlying BTC value, the issuance of stock can feel punitive, creating a loop where each increase in price weakens the rights per share.

That’s because it’s not the losses themselves that force the sale, but the mismatch between cash needs and financing options. In theory, companies can sustain large paper losses forever unless they have time, liquidity, and hard maturities that require action at the worst possible time.

But paper losses can also put companies in a corner if they have short-term debt that cannot be refinanced or if they rely on market premiums that have disappeared.

Complicating the situation is that miners can add BTC through production rather than purchase, but still face the same funding issues through a different channel: operating costs.

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

If we treat that October price regime as representative of a late-cycle buy, paper losses on high-cost tranches could be significant, even if the average cost of the company’s full stack was much lower from early mining and accumulation.

The point here is not to fix MARA to a single loss number. Importantly, if miners choose to hold until drawdown rather than sell to smooth cash flow, they will ultimately be managing timing risk.

For new entrants to the Bitcoin financial game, the same logic applies with less cushion.
Bullish is listed at 24,300 BTC and the average cost of BitcoinTreasuries public is not indicated. If that stack were built primarily around price levels in late 2025, the valuation could be brutal at $78,500, but the key question is whether the company’s operating cash flow and financial runway can withstand that hit.

“Survive” is a policy choice that will be reflected in your next purchase

The best way to understand a company’s Bitcoin financial strategy is to observe what happens when they have the opportunity to buy Bitcoin while it is underwater.

Metaplanet purchased 4,279 BTC on December 30, 2025, with an average cost above the spot price on January 30. If you continue to buy bearishly, you choose to increase your exposure while the scoreboard is negative, betting that long-term gains are more important than short-term gains.

If they slow down, it means they are choosing to protect liquidity and reduce the likelihood that capital demand and price declines will collide. Neither choice is better. They just have different risk budgets.

Trump Media is in the same late entry category according to Bitcoin Treasury data, with a higher average cost and large unrealized losses at current prices.

The practical question is whether to treat Bitcoin as a long-term Treasury reserve with negligible volatility, or as a market-facing strategy that needs to be protected through continued capital market support.

This is almost the complete opposite of the strategy of continuing to buy even when the market is plummeting. This is because the machine is likely to be considered broken if it stops. This is a hidden contract that financial finance companies make with investors. Volatility is fine, but mismatches are expensive.

Tesla and Coinbase, on the other hand, show that some companies are virtually unaffected by the market’s deep losses.

If a company’s average cost is below the spot, drawdowns do not produce the same survival story, even though Bitcoin is just as volatile for that company as it is for any other company. These companies can afford to wait a little longer because the market isn’t being asked to explain why they bought the top.

Paper losses are important because they test whether the strategy was built for survival or for optics. Bitcoin financial strategies will only fail if companies lose the ability to wait.

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