Bitcoin Falls Below Strategy's $75,451 Average Cost, Leaving 849,327 BTC About $500 Million Under Water: What That Does and Does Not Force

How the morning went on Coinbase

Five-minute candles from Coinbase's public market data show BTC went through the cost line in the 05:45 candle, fell hard at 05:55 and then came back above it for a short time.

So "below cost" was not a clean break. Spot went under, traded back above the line at times in the 15 minutes after 07:15, and then slipped under again. Anyone reading it as a level that has been lost for good is reading more than the tape shows.

What the paper loss adds up to

Strategy's November 2 filing with the SEC is the source for the holding: 849,327 BTC bought for $64.08 billion including fees, at an average of $75,451, as of November 1. The rest is our arithmetic.

• Every $1,000 move in BTC changes the stack's value by about $849 million.
• At the 05:55 low of $73,477, the stack was worth about $62.41 billion, about $1.68 billion under cost.
• At the dashboard price of $74,905, BTC sat 0.72% below the average.
• The most recent disclosed purchase, 811 BTC at $80,846 for $65.5 million, is worth about $60.7 million at that price, a paper loss of about $4.8 million.

That last tranche explains why the average has been creeping up. Buying above the average raises it, so a company that keeps buying makes its own line a little harder to clear. We covered that purchase when it was filed.

Does it have to sell? What the filings say

This is the question behind most of today's headlines, and the 10-Q for the September quarter answers much of it.

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The coins were not pledged. The report says Strategy held about 847,666 BTC at September 30, "all of which were unencumbered", and that its bitcoin did not serve as collateral for any outstanding debt on that date. Without a loan secured on the coins, a lower price does not bring a margin call on them. ChainCatcher's summary of The Defiant's report makes the same point. We found no clause tied to the average cost in the debt sections we read. The filing does warn that Strategy may take on bitcoin-backed debt in future, so this is a statement about the reporting date.

The debt comes due later. The maturity table shows $6.75 billion in total if every convertible holder uses the first repurchase date. About $1.05 billion falls in the period ending September 30, 2027, led by $1.01 billion of 2028 notes that holders can put on September 15, 2027. Another $4.90 billion falls in the following 12-month period. The report adds that a "fundamental change", as defined in the indentures, also lets holders require repurchase. We did not read the indentures themselves. Those 2028 notes convert at $183.19, while MSTR closed at $128.93 on November 6, according to Strategy's data feed. Our reading: at this share price those holders are more likely to ask for cash than for stock, which makes 2027 the date that matters.

There is cash for dividends. The November 2 filing puts the USD Reserve at $4.79 billion and USD Cash at $132.7 million. The dashboard lists annual preferred dividends of about $1.48 billion and describes the reserve as 39.8 months of dividends. Dividends took $43.4 million from the reserve in the week to November 1.

Selling is allowed, though. The 10-Q describes a board-approved BTC Monetization Program. It lets Strategy sell bitcoin to raise up to $1.25 billion for the USD Reserve, to pay preferred dividends and interest when management thinks that beats issuing stock, and to fund preferred buybacks. As of October 25, the company said it had sold no bitcoin under the $1.25 billion reserve component. So "Strategy never sells" is out of date, and "Strategy must sell now" has no support in these documents. Selling here would be a management choice.

The one place the line does matter: the accounts

The cost line has no link to forced selling, but it does matter in Strategy's tax accounting. The 10-Q says bitcoin is measured at fair value each reporting period, using Coinbase prices, and that changes run through net income. During the September quarter the holding rose above its average cost, and that released a $4.60 billion valuation allowance set up in the first half of 2026 and left a $1.98 billion deferred tax liability on the unrealized gain.

The report then says what happens in reverse. If fair value falls below the average cost basis in a future period, Strategy "would record a deferred tax asset for the unrealized loss and may be required to establish a valuation allowance". The test falls on a reporting date, and the next quarter ends on December 31, so this morning's dip changes nothing yet. Our reading: if BTC is still under the line then, reported earnings will show a much larger swing than the $460 million gap suggests.

That swing is already building, whichever side of the line BTC ends on. The balance sheet carried digital assets at $70.82 billion on September 30. The report put about 848,517 BTC at $68.27 billion on October 25, at a price of $80,456. The dashboard's $63.62 billion this morning is about $7.2 billion below the September 30 figure, even with more coins in the stack.

Here is the same stack at other prices, using 849,327 BTC and the $64.08 billion cost. It is arithmetic, with no view on where BTC goes.

The same dashboard lists BTC 40.6% under its $126,080 high.

The number that matters most for buying: the premium

Strategy pays for bitcoin largely by selling stock. The 811 BTC came from MSTR share sales, the filing says. That only adds bitcoin per share while the shares trade above the value of the bitcoin behind them. Strategy's dashboard showed an mNAV of 1.12 at 08:42 SGT, so a premium remained. Enterprise value was $69.5 billion on the last close, with $6.71 billion of debt and $13.14 billion of preferred stock counted in it.

The preferred stock gives a second route. The Defiant reported on November 4 that STRC touched $100 for the first time since May, which is Strategy's stated floor for new issuance, after roughly $2.25 billion of buybacks. The filing shows another $208.2 million of STRC repurchased in the week to November 1, paid from USD Cash. Our reading: if mNAV holds above 1 and STRC holds $100, both funding routes stay open, and a move below cost matters little. If mNAV falls under 1 for a long stretch, the stock route stops adding bitcoin per share, and that would be the real change.

If you trade BTC or MSTR around this

Do not place orders around $75,451 as if it were a trigger. The only effect the filing ties to the cost basis is an accounting one, at a reporting date. BTC crossed it in both directions this morning inside two hours. A stop just below a widely quoted number is also easy to hit in a thin market, as the 05:55 candle showed with a $1,364 range.

Read funding before you add. At about 08:45 SGT, BTC perpetual funding stayed slightly positive: +0.0049% on Bitget, +0.0026% on OKX and a last settled +0.0052% on Bybit. Our funding rates page compares venues side by side. Positive funding means longs still pay shorts, so the flush did not turn sentiment on perpetuals fully negative.

See what actually got liquidated. Our liquidations page showed $425 million over the previous four hours at 08:42 SGT across Binance and OKX, $396 million of it long, with only $9.10 million in the last hour. On that data the forced selling had mostly stopped by the time spot slipped back under the line.

If you want MSTR exposure outside US hours, our MSTR tracker lists stock tokens and perpetuals by venue, including rMSTR and MSTRUSDT on Bitget, and xMSTR and MSTR-USDT-SWAP on OKX. A token or perpetual can trade away from the last US close, so check its price against $128.93 before you read anything into it. Our tokenized stocks hub has the other tickers.

Cut the fee on whichever you trade. Bitget's base futures taker rate in our partner data is 0.06%. A $10,000 BTC perpetual order pays $6, and 60% of that, $3.60, comes back through our Bitget page. On OKX the same data lists 0.05% and a 20% share, so $5 and $1 back.

What to watch next

Strategy's bitcoin updates have reached the SEC on Mondays: its 8-K list shows filings on October 19, October 26 and November 2. A filing this week would show whether it bought during the first week of November, at what price and how it paid. The first US session after this drop also matters, since MSTR last traded before it.

What we could not confirm

• Whether Strategy bought or sold after November 1. Its latest disclosure stops at that date, so 849,327 BTC and $75,451 may already have changed.
• Who sold this morning. No source we opened names a seller or a single cause for the drop.
• Any bitcoin sale under the rest of the monetization program. The October 25 statement covers the $1.25 billion reserve component. We did not find a separate figure for the dividend and buyback components in what we read.
• The full text of The Defiant's report. Its body would not load for us, so we rely on its headline and summary, on ChainCatcher's account of it and on Coinbase's candles.