Saylor's Strategy Faces 'Sizable' Fourth-Quarter Loss From Bitcoin Tumble

Strategy Inc. is expected to report a multibillion-dollar loss in the fourth quarter, as the value of its Bitcoin holdings declined sharply. This follows a $2.8 billion profit in the previous quarter and highlights the risks of the company's high exposure to the volatile cryptocurrency.

Bitcoin dropped 24% during the quarter, prompting a swing from a profit to a substantial loss. The firm, formerly known as MicroStrategy, marked its crypto holdings at market prices after an accounting change in Q1, amplifying the impact of price swings.

Michael Saylor's company has been a major Bitcoin accumulator since 2020, but the recent price decline has raised concerns about its ability to manage expenses and meet obligations like dividends and interest payments.

Why Did This Happen?

Strategy's Bitcoin holdings have become the central focus of the company, with nearly $60 billion in BTC as of the fourth quarter. The sharp drop in Bitcoin's price exposed the company to significant unrealized losses, which are now being reflected in its earnings.

The firm adopted a fair-value accounting method that recognizes gains and losses based on market prices. This contrasts with past rules that did not recognize such swings, making Strategy's earnings more volatile.

How Did Markets React?

The stock of Strategy fell 48% in 2025, reflecting investor concerns about the sustainability of the corporate-treasury model. The company's market net asset value (mNAV) has also declined to just above 1, indicating that the stock trades at a discount to its underlying asset value.

Investors are worried that the company might be forced to sell Bitcoin to cover future costs. To address these concerns, Strategy established a $1.44 billion cash reserve in December to fund at least 12 months of preferred dividends and interest payments.

What Are Analysts Watching Next?

The company's enterprise value is now approaching the value of its Bitcoin holdings, raising questions about the long-term viability of the model. Some analysts warn that if Bitcoin continues to decline, the company might face liquidity challenges and may be forced to take more aggressive actions.

Bitcoin's price is expected to remain a key factor in the company's future performance. Strategy has projected a range of $85,000 to $110,000 for Bitcoin by year-end, and its operating income is expected to fall between a $7 billion loss and a $9.5 billion profit.

The broader crypto market is also watching to see if Bitcoin recovers in early 2026. If it continues to decline, the ripple effects could extend beyond Strategy and impact the overall confidence in corporate Bitcoin treasury strategies.