Who is footing the bill for the $64 billion accounting frenzy?

Author | Cathy, Baihua Blockchain

$60,000 has been breached.

Bitcoin has broken through a key support level that has been maintained for nearly two years, dropping to its lowest point since October 2024. On-chain data shows that institutions and whales holding between 10 and 100,000 Bitcoin have sold 45,000 Bitcoin to the market within 8 days. U.S. stocks followed suit, with cryptocurrency-related stocks collapsing collectively.

But what is truly unsettling is not the price itself.

It is those publicly traded companies that have bet their entire balance sheets on Bitcoin. They have hoarded hundreds of thousands of coins, issued hundreds of billions of dollars in debt, and relied on a sophisticated financial flywheel to tie their stock prices to the price of Bitcoin. Now, the flywheel is starting to slip.

01 Who is hurting the most?

Let’s first look at the biggest one.

• Strategy (formerly MicroStrategy): Holds 847,000 Bitcoin, having spent a total of $64.1 billion to accumulate them, with an average cost of about $75,600. With Bitcoin dropping below $60,000, the overall unrealized loss exceeds 20%. More critically, MSTR's stock price relative to its net Bitcoin assets has dropped from a high premium during the bull market to a deep discount of 0.60 to 0.65 times. In other words, the market believes this company’s $1 worth of Bitcoin is only worth $0.60.

• Metaplanet: This Japanese company is in a worse situation. It holds 40,000 Bitcoin, with an average holding cost close to $97,600, and combined with the impact of the yen's depreciation, it has an unrealized loss exceeding 37%.

• Twenty One Capital (XXI): Led by Jack Mallers, backed by Tether, Bitfinex, and SoftBank, it has a dream team. However, since the first day of its SPAC listing, the stock price has been on a one-way street, dropping more than 85% from its peak, with valuation premium going to zero. By May 2026, SoftBank chose to transfer 26% of its shares at a full discount to Tether and withdrew from the board. The big players have run away first.

• Solmate: The most dramatic case has to be this company. Originally called Brera Holdings, its business was to hold equity in several low-tier football clubs. Inspired by MicroStrategy during the bull market, it announced a complete transformation and raised $300 million to fully invest in Solana. Cathie Wood's ARK Invest even touted it as a "revolution in asset treasury." As a result, Solana dropped 53%, and Solmate's stock price plummeted from $249 to $5. Internal board conflicts ensued, with major shareholders accusing each other of draining the company's treasury, leading to the resignation of the CEO and chief economist.

This is not a failure of the holding model. This is a normal outcome of a gambling game without a core business to back it up.

02 No liquidation, but the flywheel is stalling

There is a panic narrative circulating in the market: if Bitcoin drops below $60, MicroStrategy will be forcibly liquidated.

This is a misjudgment of financial instruments.

In 2022, MicroStrategy did borrow a $205 million mortgage from the crypto bank Silvergate, directly linked to Bitcoin's collateral ratio, and was nearly liquidated at that time. The ATM was shut down, and it could only continue to rely on issuing more MSTR common stock to cash out to pay interest. However, MSTR itself was already trading at a 0.6 times NAV discount, and continuing to issue at a discount would severely dilute the Bitcoin share represented by each share.

This creates a death spiral: halting dividends leads to a collapse in "digital credit" ratings; continuing to issue results in common shareholders being wiped out.

Michael Saylor, in the first quarter analyst meeting of 2026, finally loosened his stance. He said that in an extreme financing freeze environment, the company "is very likely to voluntarily sell some Bitcoin" to pay preferred dividends.

This statement contradicts his long-standing public doctrine of "never selling Bitcoin."

03 Accounting standards are making things worse

The ASU 2023-08 standard, effective from 2025, requires publicly traded companies to account for Bitcoin at fair value, with quarterly fluctuations directly impacting the income statement.

• During a bull market, this is a money-printing machine. When Bitcoin rises, the income statement shows billions of dollars in unrealized profits, ROE soars, and quantitative stock selection models and index filters automatically pull these companies in. Traditional funds then flood in.

• During a bear market, the money-printing machine turns into a paper shredder.

Strategy recorded an unrealized loss of $14.46 billion in the first quarter of 2026, with a GAAP net loss of $12.54 billion for the quarter. This loss exceeds the profits of most blue-chip companies globally.

The chain reaction is even more critical. Index providers like MSCI are beginning to assess whether to exclude these "pseudo-industrial companies." Once excluded from the index, passive funds and pension trusts tracking the index will be forced to sell, creating a spiral of "price drop → exclusion → passive fund sell-off → price continues to drop."

This is not a free market choice; it is a mechanical sell-off driven by rules.

04 Fall 2027 will be the real test

In the short term, holding companies will not face liquidation. The design of unsecured debt and perpetual preferred stock gives them a buffer of "exchanging time for space."

However, if Bitcoin cannot return to the average cost line of $75,000 within the next 12 to 24 months, the convertible bond repurchase window starting in the fall of 2027 will turn into a credit liquidation.

The path is clear: Bitcoin lingers at a low level, MSTR's stock price remains below the conversion price, and convertible bondholders exercise their repurchase rights to demand full cash redemption, financing channels freeze, preferred dividends exhaust cash reserves, and the final step is being forced to sell hundreds of thousands of Bitcoin to exchange for fiat currency.

That will be a true liquidity crisis.

The holding company model does not have the ability to avoid liquidation. It merely replaces "price-triggered immediate liquidation" with "time-triggered debt repayment crisis."

Do not focus on the technical support level of $60,000. Focus on the calendar for September 2027.