Despite claiming it could do better, Strategy is currently performing well below Bitcoin—which was already negative—over the past year. This situation is causing the results of pension funds that bought MSTR shares to plummet.
Pension funds lose big on Strategy
Strategy and its compulsive accumulation of Bitcoin since 2020 occupy a special place in the cryptocurrency ecosystem, with founder Michael Saylor regularly shifting from the rank of outstanding strategist to that of enlightened maximalist depending on the rise or fall of the BTC price.
Is it necessary to explain where he currently stands, with Bitcoin having just confirmed its return to the $70,000 level? Especially when we consider the significant collapse of MSTR stock since its last peak in July, now close to 70%.
And while Strategy claims to have its back covered with more than $2 billion in cash reserves, some of its investors are seeing red. The situation is all the more critical when it comes to US pension funds that have bet on MSTR stock.
This observation was made by the crypto media outlet DLNews, which highlights 11 such structures that had committed a total of $577 million—approximately 1.8 million MSTR shares—at the time of the official declaration of their investments. This is enough to weigh heavily on their balance sheets…
A simply bad strategy, or just poorly timed?
According to data available on the Fintel platform, this overall investment currently shows an unrealized loss of $337 million, which is still theoretical as long as the position is not liquidated, implying a 60% decline for 10 of these identified funds.
These losses raise questions about the relevance and reliability of Digital Asset Treasuries (DATs) as vehicles for investment and indirect exposure to the crypto market. It begs the question of whether the strategies of these pension funds were simply bad, or just poorly timed.
This situation mainly affects public sector pension funds, with investments in Strategy shares representing a tiny fraction of their portfolios. As a result, the pensioners concerned are not at risk of seeing their payments disappear because of these poor results.
At the same time, this situation could well undermine the desire for acceleration recently expressed by SEC Chairman Paul Atkins regarding the opening of 401(k) retirement funds to crypto investments. This is because this model is based on a very different principle: beneficiaries only recover any profits.
This is enough to reignite the eternal debate about our pay-as-you-go pension model, which may never benefit people under the age of 50 in its current form.
