- Eleven U.S. pension funds are facing $337 million in paper losses on Strategy (MSTR) stock.
- The positions of most funds are down by about 60 %, which makes them vulnerable to the risks of Bitcoin-linked equity investments.
Eleven major U.S. public pension funds are now reporting substantial unrealized losses on microcap Strategy shares linked to Bitcoin. Their combined holdings of almost 1.8 million Strategy shares are currently worth $240 million. This is down from $577 million, which indicates a substantial drawdown. Market information reveals that this represents a paper loss of $337 million, according to Fintel.
Strategy’s stock has declined approximately 67 % over the past six months, according to consolidated reports. Most pension plans are down close to 60% on their original purchases. This price action mirrors extreme volatility in the broader crypto market. The leveraged nature of Strategy’s Bitcoin holdings amplified losses as the digital asset slid.
Breakdown of Pension Fund Exposure
The New York State Common Retirement Fund holds one of the largest positions and has lost nearly 60 % of its value. Florida’s State Board of Administration similarly sits on substantial unrealized losses exceeding $40 million. Wisconsin’s public pension plan saw its stake drop about 60% in value, reflecting broader trends. Other state funds in North Carolina, New Jersey, Utah, Kentucky, and Maryland report similar declines. Michigan’s pension plan is the lone outlier with a much smaller and less impacted position.
This group downturn illustrates the indirect risk of Bitcoin exposure via equities such as Strategy. These can cause retirement savings to suffer losses in the absence of direct Bitcoin investment. Pension fund administrators had previously been enthusiastic about Strategy as a high-beta proxy for Bitcoin price returns, prompting investments. As Bitcoin prices remained low, the proxy stock fell sharply and contributed to paper losses.
Market and Strategy Background
Strategy, under its management, had a strategy of raising equity funds to purchase Bitcoin, resulting in leveraged exposure in the traditional market. This strategy had been successful during periods of market optimism but exacerbated losses during periods of falling prices. Attitudes towards leveraged Bitcoin investments had soured with the cooling of the overall crypto market.
The U.S. public pension funds have faced significant unrealized losses in Strategy stock due to the sharp correction in the price of Bitcoin. There was a notional loss of approximately $337 million and a decline of approximately 60% in most positions. This demonstrates how leveraged Bitcoin-related equities can inject considerable volatility into long-term retirement portfolios. In the future, fund managers could reassess the use of high volatility proxy investments relative to traditional assets for retirement security.
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