The world's largest cryptocurrency peaked around $126,200 in October 2025...
Today, it trades near $66,200. That's a little more than half of where it was just around eight months ago.
As you probably guessed, I'm talking about bitcoin.
Meanwhile, one of the most talked-about companies on Wall Street has tens of billions of dollars accumulating bitcoin for years – at an average price of $75,680 per coin.
With bitcoin trading below that average cost, the company's huge position is underwater.
In a recent filing, this company disclosed that it holds 845,256 bitcoin. So at today's prices, this is a massive paper loss.
That's obviously a problem for this company. But there's more to it than just the bitcoin price.
And as I'll also explain, the Power Gauge is flashing some major warning signs, too...
A Massive Obligation With No Easy Way Out
Folks, I'm talking about tech company Strategy (MSTR).
It used to be called MicroStrategy. And it's a business intelligence software company that has reinvented itself as a bitcoin holding vehicle.
To fund all those bitcoin purchases, Strategy's management issued debt. Then it issued preferred stock, then issued more stock – and rinse and repeat.
Today, Strategy has five separate series of preferred stock. Each has its own dividend obligation, which totals somewhere between $750 million and $800 million in annual payments.
Those are payments every single year – no matter what bitcoin does.
So that's nearly a billion dollars in recurring obligations... sitting on top of a balance sheet where the primary asset is below the average cost basis.
And it gets worse...
When preferred stock prices fall, as they have been, the company is forced to raise dividend rates. Higher dividends mean higher cash burn. Higher cash burn means more pressure on the balance sheet.
And that pressure on the balance sheet led to the "unthinkable" earlier this month...
For the first time since 2022, Strategy sold bitcoin – not to buy more, but rather to help pay the bills.
Strategy disclosed this quietly in a regulatory filing. In that filing, the company said it sold 32 coins for about $2.5 million.
That's a tiny amount. But it's a huge signal...
You see, Strategy co-founder Michael Saylor built his reputation on "never" selling bitcoin. And breaking this "rule" recently wasn't the result of some grand strategic pivot, but because Strategy needed cash to meet a recurring obligation.
The stock has already paid a steep price. And as I said, the Power Gauge doesn't like what it sees with Strategy either...
Our System Sees More Pain Ahead for Strategy
A bit before the news of the bitcoin selling emerged, MSTR shares traded for around $196 in mid-May. On Friday, they closed at about $124. That's a roughly 37% collapse in about a month.
And Strategy's stock was already under pressure before all this, too. By now, MSTR shares have collapsed more than 70% from their all-time high of about $474 back in late 2024. Take a look...
That's a huge wipeout.
Today, Strategy gets a "very bearish" rating in the Power Gauge. Its Chaikin Money Flow – which measures the "smart money" activity on Wall Street – is negative. And the stock's relative strength versus the broad market is weak.
Putting it all together, Strategy's massive bitcoin bet is struggling right now. And the Power Gauge is about as clear as it gets... Stay away from this stock.
Good investing,
John Evelius
