Bitcoin Price Analysis: Treasury Companies Break Even Near $80,000. What Happens if BTC Falls Below It?

Treasury companies, public firms that hold Bitcoin on their balance sheets, have an average cost of about $80,000 per coin, according to Glassnode. Bitcoin (CRYPTO: BTC) trades at $81,836, down 1.9% over the past 24 hours and 35.1% below its all-time high. The current price is just above what these companies paid.

According to Glassnode, Bitcoin has consistently closed above $80,000 since September 18, putting these companies back in profit. However, these firms have barely resumed buying as prices approach their average cost. On October 15, Bitcoin dropped to $79,676 during the day but closed at $82,131. This raises the question: Is the $80,000 mark a protective floor for these buyers, or could a drop below it trigger a more significant decline?

Why Bitcoin Treasury Companies’ $80,000 Cost Could Act as Support

The cost basis is the average price a company paid per Bitcoin. For those with an $80,000 cost basis, trading above that level creates paper profits; trading below it creates paper losses. Because most U.S. companies must report Bitcoin at fair value each quarter, a price drop below their cost basis would translate into reported losses.

This group is substantial, with public companies holding approximately 1.3 million BTC, valued around $106.7 billion. Strategy Inc. (NASDAQ: MSTR) is the largest holder, possessing more than 848,000 BTC following a significant purchase on October 5.

Traders often view large holders’ cost basis as a support level where buying interest may develop. This is because those companies have a vested interest in defending their average prices, and outside investors see an opportunity to buy near the prices insiders paid. Michael Saylor, co-founder of Strategy, expressed optimism, saying, “The bull market is calling,” as Bitcoin peaked at over $84,500 before retreating.

Strategy Dominates the $80,000 Average

The $80,000 average reflects a skewed group of companies. Strategy’s large holdings drive this average, so the cost primarily reflects its purchase timeline. Strategy is currently in a strong position, showing a profit with an entry value of $64.6 billion against a market value of $69.4 billion.

By contrast, smaller holders are facing challenges. For instance, Japan’s Metaplanet reports an entry value of $3.9 billion, with a current value of only $3.6 billion, indicating it’s already operating at a loss. Similarly, Trump Media & Technology Group (NASDAQ: DJT) shows an entry value of $1.13 billion but has a current value of only $781 million.

Additionally, holdings trackers list no entry value for several large holders, such as MARA Holdings (NASDAQ: MARA), creating gaps in the group’s overall cost basis.

What Could Force Bitcoin Treasury Companies to Sell

Several pressures could force selling. Debt covenants may require companies to maintain collateral above specific thresholds, resulting in margin calls if Bitcoin prices decline. Also, obligations like preferred stock dividends still need coverage during a downturn, and a plummeting share price could limit access to new capital, increasing the likelihood that companies sell Bitcoin for cash.

Index pressure adds to the risk. MSCI is moving to drop Strategy from its indexes under new rules, and index funds that drop a stock must sell it, weighing on the share price Strategy needs to raise capital.

ETF Flows Are Doing the Buying Above $80,000

ETF flows can indicate where new capital is being allocated. On October 21, U.S. spot Bitcoin ETFs attracted $528.4 million, following $526.6 million on October 19, with total net inflows reaching $57.96 billion and net assets hitting $109.3 billion.

However, these flows can be volatile. For instance, outflows of $487.1 million and $244.1 million occurred on October 7 and 8, respectively, as Bitcoin dropped from an $85,540 close on October 6 to a low of $80,315 by October 8.

Currently, Bitcoin’s 50-day moving average sits at $81,699, just below the current trading price, with a recent weekly peak of $84,856. Although Bitcoin has risen by 31.4% over the last 90 days, it remains down by 21.8% over the past year.

What Happens if Bitcoin Falls Below $80,000?

ETF buyers, not Bitcoin treasury companies, appear to be the main force holding Bitcoin above $80,000, since treasury buyers haven’t stepped up to defend their cost. If Bitcoin holds above $80,000 and its $81,699 50-day average, the group stays in profit, keeps its fundraising options open, and could retest $84,856 if ETF inflows continue.

A fall below $80,000 could hit harder. The group’s average would slip underwater, reported losses would follow, and the risk of forced selling would rise, mostly for smaller holders with debt or preferred dividends. A run of daily ETF outflows like October 7’s $487.1 million, or a close below the 14-day low of $79,676, could signal that support is breaking.

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