Bitcoin News Today: Bitcoin's Swings Turn MicroStrategy's Earnings into a $17–$19 Gamble

MicroStrategy Inc. (MSTR), the Bitcoin-focused software company led by Michael Saylor, has slashed its 2025 earnings guidance and established a $1.44 billion U.S. dollar reserve to cushion against market volatility, sparking investor concerns amid a sharp retreat in Bitcoin prices. The company now forecasts a wide range of outcomes for diluted earnings per share (EPS), from a $17 loss to a $19 gain, reflecting its heightened exposure to Bitcoin's price swings. This update follows a year-end Bitcoin price assumption range of $85,000 to $110,000, a stark contrast to the previous $150,000 target.

The revised guidance underscores the challenges of maintaining profitability in a crypto-centric business model. MicroStrategy's operating income is projected to swing between a $7 billion loss and a $9.5 billion profit, while net income could range from a $5.5 billion deficit to a $6.3 billion gain. The company attributed these fluctuations to its adoption of a new U.S. accounting standard requiring crypto assets to be valued at fair market price, amplifying the sensitivity of its financial results to Bitcoin's volatility.

To stabilize its liquidity, MicroStrategy announced the creation of a USD reserve funded through the sale of Class A shares under its at-the-market offering program. The reserve is intended to cover at least 12 months of preferred stock dividend payments and interest expenses on existing debt, with a long-term goal of extending coverage to 24 months. Saylor framed the move as a strategic evolution, stating it would "better position the company" to navigate short-term market volatility while delivering on its vision of being the world's leading issuer of digital credit.

The company's Bitcoin holdings have grown to 650,000 coins, with a cumulative investment of $48.38 billion and an average purchase price of $74,436 per BTC. Despite recent price dips, Saylor has maintained bullish rhetoric, even purchasing an additional 130 BTC at $89,960 each to bolster the company's treasury. However, the stock has underperformed, dropping 4.5% pre-market to $169.15 as Bitcoin fell below $90,000.

Analysts have responded with mixed signals. While Cantor Fitzgerald cut its price target to $560 from $697, Cowen and Citigroup reiterated "buy" ratings, with a consensus price target of $485.80. Institutional investors, including VestGen Advisors LLC and E Fund Management Hong Kong Co. Ltd., have increased stakes in the stock, with VestGen's holdings rising by 54.9% to 6,785 shares valued at $2.74 million.

MicroStrategy's updated Bitcoin key performance indicators (KPIs) include a projected yield of 22%–26% and a dollar gain of $8.4 billion to $12.8 billion, contingent on successful capital raises. The company also emphasized its role in mainstreaming Bitcoin as corporate treasury assets, with Saylor advocating for its adoption as a hedge against inflation and a tool for yield generation.

As the market digests these developments, investors remain divided. While Saylor's aggressive Bitcoin strategy has positioned MicroStrategy as a bellwether for corporate crypto adoption, the widening guidance range and stock volatility highlight the risks of a business model deeply intertwined with a single asset's performance.