Although it claimed it could do better, Strategy is currently posting returns that are well below those of Bitcoin—which are already negative—over the past year. This situation is causing the returns of pension funds that bought MSTR shares to plummet.
Pension Funds Suffer Heavy Losses on Strategy
Strategy and its compulsive accumulation of Bitcoin, which began in 2020, occupy a unique place within the cryptocurrency ecosystem, with founder Michael Saylor regularly shifting from the role of an unparalleled strategist to that of an enlightened maximalist depending on whether the price of BTC is rising or falling.
Is it even necessary to explain which camp he’s in right now, with Bitcoin having just reclaimed the $70,000 level? Especially when you consider the sharp decline in MSTR stock since its last peak in July, which now stands at nearly 70 percent.
Strategy’s MSTR stock is down more than 60% over the past year
And while Strategy claims to have a safety net in the form of a cash reserve exceeding $2 billion, some of its investors are seeing red. The situation is all the more critical when it comes to U.S. pension funds that have bet on MSTR stock.
This finding, reported by the crypto media outlet DLNews, highlights 11 such entities that had committed a total of $577 million—approximately 1.8 million MSTR shares—at the time of the official announcement of their investments. 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—a loss that remains theoretical until the position is liquidated—representing a 60% decline for 10 of these identified funds.
These losses raise questions about the relevance and reliability of Digital Asset Treasuries (DATs) as investment vehicles and indirect exposure to the crypto market. It even leads one to wonder whether these pension funds’ strategies were simply poor, or just poorly timed.
This situation primarily affects public-sector pension funds, with investments in Strategy shares representing a tiny fraction of their portfolios. As a result, the retirees in question are unlikely to see their benefits disappear due to these poor results.
At the same time, could this situation undermine the push recently expressed by SEC Chair Paul Atkins to open up 401(k) retirement plans to crypto investments? After all, this model is based on a very different principle: beneficiaries receive only any potential profits.
This is sure to reignite the age-old debate about our pay-as-you-go pension system, which, in its current form, may never benefit people under the age of 50.
