Michael Saylor has long noted that Bitcoin’s volatility “is a feature, not a bug” when pitching his cryptocurrency accumulator Strategy Inc.
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Investors will soon see the downside of that, with the company likely to report a multibillion-dollar loss when it releases results for the just-ended fourth quarter. That would be a swing from a $2.8 billion profit in the previous quarter, reflecting an unrealized loss tied to the falling value of the company’s roughly $60 billion Bitcoin stockpile.
“There was this one-time pop, but that is a different story in this quarter,” said Aaron Jacob, an associate professor at Brigham Young University and senior adviser at Taxbit. “It is going to be a sizable loss.”
Strategy initially adopted an accounting change in the first quarter that requires valuing the firm’s crypto holdings at market prices, which is why it is expected to book such a big hit: Bitcoin fell 24% during the fourth quarter. The multibillion loss still comes at a critical time for the dot-com-era software maker turned leveraged Bitcoin proxy. Investors have begun to sour on the treasury company model Strategy co-founder and chairman Saylor pioneered more than five years ago. After outperforming benchmark stock indexes since this shift, the common shares of the company formerly known as MicroStrategy tumbled 48% in 2025.
The declining share price raised concern that Strategy would have to sell Bitcoin to meet future costs such as mounting dividends and interest payments since the cryptocurrency doesn’t produce any income and the software business generates little positive cash flow. To help alleviate those concerns, Strategy established a cash reserve on Dec. 1 by selling common shares.
The Tysons Corner, Virginia-based company also updated its full-year earnings guidance at the start of last month, assuming a price range of between $85,000 and $110,000 for Bitcoin by year-end. Based on that estimate, it projected that operating income would range from a loss of $7 billion to a profit of $9.5 billion. With Bitcoin ending last year down 6.5% to $87,648, the operating loss is likely to be closer to the lower end of the projected range.
A spokesperson for Strategy didn’t respond to a request for comment.
Saylor, who started purchasing Bitcoin as a hedge against inflation in 2020, isn’t alone in facing large losses in the wake of the fourth-quarter collapse in crypto prices. Last year, a flurry of public companies adopted Strategy’s playbook to accumulate digital assets and woo investors that wanted leveraged crypto exposure through the stock market. Shares of companies such as the Thomas Lee-backed BitMine Immersion Technologies Inc. soared before tumbling during the digital-asset downturn. They are also subject to the same fair value accounting standards.
“These unrealized gains and losses are being recognized contemporaneously with changes in market value,” said Bruce Pounder, executive director at accounting advisory firm GAAP Lab. “This is completely different from the prior rule, in which neither unrealized losses nor unrealized holding gains were recognized.”
Saylor’s personal wealth also took a significant hit in 2025 amid the tumble in the price of Bitcoin and the shares of Strategy, dropping around 40% to about $3.8 billion, according to the Bloomberg Billionaires Index.
In the meantime, Strategy faces another possible blow to investor confidence. The enterprise value of the company is on the verge of dropping below that of its Bitcoin stockpile for the first time in more than two years, underscoring the growing doubts about the sustainability of the corporate-treasury model. The company’s enterprise value — which includes indebtedness and the aggregate notional value of its perpetual preferred stock — was about $61 billion, data compiled by Strategy show.
The shares have slumped almost 70% from the record high touched in November 2024, dragging the company’s mNAV — the ratio of its market capitalization and debt to its token holdings — to just above 1. The premium investors were willing to pay for the shares underpinned Saylor’s argument for adopting the Bitcoin buying strategy. Now that appears to be almost gone too as shareholders face a multibillion loss for the quarter.
