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2026 has brought the crypto market to its knees, which was already under pressure since the flash crash on Oct. 10 last year.
Bitcoin (BTC) crashed below $73,000 on Feb. 3, and I checked—it is the king coin's worst crash since early November 2024.
As per the onchain analytics platform CoinGlass, over $660 million worth of crypto positions have been liquidated within the last 24 hours. It includes $526.5 million in long and $135 million in short positions.
Bitcoin, with $112.7 million, led the crypto liquidations, followed by $96.5 million in Ethereum (ETH) positions.
In the past 24 hours, 161,033 traders were liquidated.
An ETH/USDT liquidation order worth $6 million on Binance turned out to be the largest single liquidation order within the last 24 hours.
Michael Saylor co-founded MicroStrategy (Nasdaq: MSTR), now Strategy, as a software company in 1989. But when he came across Bitcoin during the coronavirus pandemic in 2020, he decided to turn his software enterprise into a BTC-focused digital asset treasury (DAT).
The way other public companies hold cash on their balance sheets, a DAT company holds crypto assets like Bitcoin on its balance sheet.
The company continued to buy Bitcoin over the last half decade to emerge as the world's largest Bitcoin treasury company. As per the latest update, Strategy held 713,502 Bitcoin on its balance sheet.
When Bitcoin surged, Strategy roared. But the cryptocurrency's crash in October last year turned out to be a particularly sour experience for the company.
Strategy uses a metric called the market Net Asset Value (mNAV) to compare its market value against Bitcoin's per-share value.
When BTC used to hit new record prices, Strategy's mNAV used to stay much above 1. It meant the company's enterprise value remained even higher than the value of BTC it held.
Traders got attracted to Strategy's premium, as it seemed more profitable to buy MSTR shares than purchasing Bitcoin directly.
But when BTC crashed last October onwards, mNAV began to veer toward 1 and it offered a negligible premium.
The trend concerned traditional players such as MSCI (Morgan Stanley Capital International), which began to contemplate if DATs with more than 50% of their balance sheet dedicated to crypto assets should even remain on its stock indices.
Saylor fought back and called the MSCI's proposal "discriminatory, arbitrary, and unworkable."
On Jan. 6, MSCI announced that it has decided to delay the proposal and said it requires further research and consultation. However, the 50% threshold regarding crypto allocation will remain unchanged, MSCI added.
Bitcoin today fell as low as $72,897.14, as per CoinMarketCap.
And it turns out the price mark is significantly lower than the average cost of $76,052 at which Strategy has acquired all its Bitcoin holdings so far. This puts Strategy underwater on its Bitcoin holdings.
However, there is no pressure on the company's balance sheet so far. But if Bitcoin continues to fall further, it could slow down the company's future BTC acquisition.
Note that none of Strategy's Bitcoin holdings are pledged as collateral, so there's no risk of forced selling just because of the recent crash.
The MSTR stock was trading at $129.03 at the time of writing, down 7% in the last 24 hours. In fact, the stock is going through its worst phase since September 2024.
The company is expected to report its financial results for the fourth quarter of 2025 after the market closing hours on Feb. 5.
Popular TV personality and CNBC host Jim Cramer continued to take a dig at Saylor ahead of the earnings.
Strategy co-founder, however, remains defiant in his chase of Bitcoin.
At press time, Bitcoin was trading at $74,674.14, down 4.5% in the last 24 hours.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly volatile and risky. Always conduct your own research before making any investment decisions.
