Bitcoin trading below a company’s average purchase cost describes a valuation gap. It does not, by itself, establish that the company has sold at a loss or cannot meet its obligations. For Strategy, the business formerly known as MicroStrategy, the useful questions concern purchase cost, accounting, financing and cash needs.
What does Bitcoin below cost basis mean?
In this article, average purchase cost means total acquisition cost divided by the number of bitcoins acquired. It is a portfolio comparison, not a calculation of an individual investor’s tax liability.
For a simplified, hypothetical example, suppose a company buys two bitcoins for $60,000 and $80,000, excluding fees. Its total cost is $140,000 and its average is $70,000. At a market price of $65,000, the holding is worth $130,000: $10,000 below purchase cost. These figures illustrate the arithmetic; they are not Strategy’s holdings or today’s Bitcoin price.
A dated example from Strategy’s disclosures
Strategy’s first-quarter 2025 results reported 528,185 bitcoins at 31 March 2025. Their original cost was about $35.6 billion, compared with a market value of $43.5 billion. Average purchase cost was approximately $67,457 per bitcoin; the quarter-end price was $82,445. Those historical figures do not establish whether Bitcoin is above or below Strategy’s average cost today.
Purchase cost and accounting losses are different
The company adopted fair-value accounting on 1 January 2025, recognising changes in Bitcoin’s fair value in earnings each reporting period. It reported a $5.9 billion unrealised fair-value loss in that first quarter. A quarterly accounting loss can therefore coexist with holdings valued above their original purchase cost.
What else matters when assessing risk?
The same disclosure describes debt and equity financing and explains that its “BTC Yield” metric is not shareholder investment return or a liquidity measure. Cost comparisons alone leave these financing questions unanswered.
- Which reporting date do the holdings and liabilities cover?
- What payments fall due, and what cash is available?
- Would raising funds require new borrowing, share issuance or asset sales?
- Are figures company disclosures, market quotes or hypothetical scenarios?
Sources and related reading
Read Strategy’s Q1 2025 financial results, published 1 May 2025 for the historical figures and metric definitions. For another example of reading dated market information, see our India Ratings rupee forecast explainer.
Updated 27 September 2026 to correct the accounting explanation and distinguish historical data from a current market claim. This is an educational explainer, not a live price report.
