Bitcoin Corporate Holdings Underwater: Investment Logic Behind 80% of Institutions Facing Unrealized Losses

According to an analysis by Capriole Investments founder Charles Edwards, approximately 80% of companies holding Bitcoin as a balance sheet asset are currently experiencing unrealized losses. Although the price of Bitcoin has recently rebounded to around $71,000, a more than 4% recovery from its previous low of $67,500, with a cumulative gain of 6.4% over the past week and nearly doubling in two weeks, it is still down about 44% from its all-time high in October 2024 and nearly 13% year-to-date.

In terms of holding costs, weighted by holding size, the average purchase price for large companies like MicroStrategy is approximately $81,000. The overall average cost for institutions is around $78,000, both higher than the current market price. Furthermore, since the launch of Bitcoin spot ETFs in January 2024, they have accumulated approximately 1.3 million BTC, while corporate Bitcoin holdings total about 1.1 million BTC, representing nearly 5% of the total network supply.

Edwards pointed out that a similar proportion of institutional unrealized losses historically occurred when Bitcoin's price was near $90,000, a stark contrast to the current market environment. He emphasized that the current losses are not short-term fluctuations but part of a structural adjustment, and that "Bitcoin does not offer risk-free returns." Despite the bearish market sentiment, historical data suggests that rebounds after deep corrections are often accompanied by stronger long-term momentum. It is worth noting that, although most companies are still in the red, their continued holding behavior itself conveys a recognition of long-term value. As the market gradually absorbs the impact of high-level purchases, the resilience of corporate-level holdings may become an important force supporting Bitcoin's price.