Strategy Reports $12.4 Billion Q4 Loss as Bitcoin Plunge Threatens Corporate Treasury Model
Strategy, the world's largest corporate holder of Bitcoin, reported a staggering $12.4 billion net loss for the fourth quarter of 2025 on
Quick overview
- MicroStrategy reported a $12.4 billion net loss for Q4 2025 due to a significant drop in Bitcoin prices, causing shares to fall 17%.
- The company's Bitcoin holdings have lost nearly $9 billion since 2020, with current holdings valued at approximately $45.4 billion.
- Despite the losses, MicroStrategy maintains a strong cash reserve of $2.25 billion and no significant debt maturities until 2027.
- Concerns among investors are rising as the company's valuation relative to its Bitcoin holdings has diminished, making it harder to acquire more Bitcoin.
Strategy (MSTR), the world’s largest corporate holder of Bitcoin BTC/USD, reported a staggering $12.4 billion net loss for the fourth quarter of 2025 on Thursday, as the cryptocurrency’s dramatic price collapse wiped out billions in paper value and sent shares tumbling 17% to their lowest level in a year and a half.
The Cost of a Leveraged Bitcoin Strategy
The loss occurred as Bitcoin fell from its peak of about $120,000 in early October to about $89,000 by the end of the year. The selloff has only worsened in 2026, with Bitcoin sliding below $64,000 this week, falling beneath Strategy’s average purchase price of $76,052 per coin for the first time.
With its current holdings of 713,502 Bitcoin, which is worth about $45.4 billion, Strategy has lost almost $9 billion on its $54.2 billion investment since 2020. The company’s price has plunged 71% over the previous six months and is 76% below its 2024 high of $457.
A “Digital Fortress” Built on Debt and Cash
During Thursday’s earnings call, business leaders attempted to project confidence despite the enormous losses. “I’m not worried, we’re not worried, and no, we’re not having issues,” CEO Phong Le told investors, adding that Strategy’s business value still outweighs its Bitcoin holdings.
Chief Financial Officer Andrew Kang hailed the company’s balance sheet as “stronger and more resilient today than ever before,” saying that Strategy has built “a digital fortress” anchored by its large bitcoin holdings. The corporation concluded the quarter with $2.25 billion in cash reserves, sufficient to cover 30 months of preferred stock dividend payments.
Crucially, Strategy won’t have any significant debt maturities until 2027, so it won’t be under any immediate need to sell its Bitcoin assets in order to pay its debts. According to Le, its $8.2 billion in convertible debt amounts to about 13% net leverage, which is less than the norm for S&P 500 businesses.
Still, the deteriorating scenario has aroused concerns among investors and analysts. Strategy’s premium valuation to its Bitcoin holdings has disappeared, with the company’s so-called modified net asset value plummeting to only 1.1. This makes it extremely difficult for Strategy to accrue additional Bitcoin per share through its regular approach of issuing new stock.
MicroStrategy (MSTR) Stock Outlook
Executive Chairman Michael Saylor, known for his unflinching Bitcoin promotion and “buy and never sell” mindset, tweeted “HODL,” cryptocurrency lingo for keeping assets through volatility, on social media before the earnings release. Yet even Saylor confirmed last year that selling Bitcoin remains a possibility, albeit the company has never done so.
The company did disclose some encouraging news, with fourth-quarter revenues up 1.9% year-over-year to $123 million, driven primarily by its heritage business intelligence activities. Strategy also keeps developing its “Digital Credit” offerings, with President Le touting the company’s variable-rate preferred shares, currently paying 11.25% monthly.
As Bitcoin analysts at Stifel believe the cryptocurrency might fall as low as $38,000 in coming months, representing a potential 42% decrease from current levels, Strategy’s audacious gamble on Bitcoin faces its most serious test yet. Prediction market traders now assign a 32% probability that the corporation will break with tradition and sell some holdings this year, up from just 10% a week ago.
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