Bitcoin News Today: Strategy Faces $5.9 Billion Loss, 8.7% Share Drop, Lawsuits Over Bitcoin Strategy

Strategy, the company formerly known as MicroStrategy, has been at the forefront of using Bitcoin as a corporate treasury asset since 2020. The company has accumulated over 601,550 BTC and has no plans to limit its Bitcoin holdings. However, this approach has drawn scrutiny from investors, leading to multiple lawsuits. As of mid-July, at least seven law firms have filed complaints against Strategy, with many of the claims alleging that the company overstated the profitability of its Bitcoin investment strategy and understated the associated risks, including the potential for significant losses under the new ASU 2023-08 accounting principles.

During the first quarter of 2025, Strategy recorded an unrealized fair value loss of $5.9 billion on its digital assets. This disclosure, made in an 8-K filing to the SEC, highlighted the potential challenges the company faces in regaining profitability, especially if it incurs further unrealized losses related to its digital assets. The disclosure was followed by an 8.7% drop in Strategy’s share price on April 7, which has been cited in at least one of the lawsuits.

Legal experts, including crypto lawyer Tyler Yagman, have noted that these securities disputes could become a multi-year process. Yagman, an associate at The Ferraro Law Firm, pointed out that many class action lawsuits are filed but often do not progress beyond the initial stages. Brandon Ferrick, general counsel for Web3 infrastructure company Duoro Labs, described the legal cases as "super common," noting the challenges of accurate investment disclosures, especially in emerging industries like crypto. He also mentioned that plaintiffs are alleging overstated profitability and understated risks, rather than claiming that these disclosures were entirely absent.

Despite the ongoing legal challenges, Strategy has continued its Bitcoin accumulation. On Monday, the company purchased an additional $472 million worth of BTC, and on Thursday, it reached an all-time high market capitalization. Michael Saylor, the executive chairman of Strategy, shared this news on X. The company’s earnings for the second quarter of 2025 are scheduled to be released on July 31. Analysts surveyed by TipRanks expect an earnings per share (EPS) of -0.10, following a significant miss in the previous quarter when the company posted a -16.53 EPS for Q1.

The crypto space has seen significant developments with the launch of Bitcoin exchange-traded funds (ETFs) in January 2024, attracting growing institutional capital. This has increased investor demand for transparency around corporate crypto holdings. Yagman emphasized the need for management teams to be as transparent and direct as possible, given the volatile nature of the market. This transparency is crucial for companies like Strategy, which operate in a manner similar to actively managed ETFs but within a corporate structure.