Strategy Kickstarts 2026 With $116M Bitcoin Buy as Q4 Paper Loss Hits $17B

Strategy Inc. (MSTR) Bitcoin Holdings and Market Impact

Strategy Inc. (MSTR) reported acquiring 1,286 Bitcoin in late December 2025 and early January 2026, bringing total holdings to 673,783 Bitcoin valued at $50.55 billion. The company spent $116 million to acquire these coins at an average price of $90,391 according to reports. Strategy funded the purchases through at-the-market equity offerings, generating $116.3 million in net proceeds from January 1–4 as confirmed by financial reports.

The company's digital asset portfolio includes a $17.44 billion unrealized loss in the fourth quarter of 2025, linked to the decline in Bitcoin's price. This loss reflects a significant portion of the company's quarterly earnings adjustments due to fair-value accounting standards according to financial analysis. The full-year unrealized loss totaled $5.4 billion, with a $1.55 billion deferred tax benefit as reported by investors.

Strategy maintained $2.25 billion in cash reserves as of January 4, 2026, to fund preferred stock dividends and debt interest according to market analysis. The cash reserve is sufficient to cover 32.5 months of dividend payments at current levels as stated in financial reports. The company has $41.5 billion in remaining capacity across its at-the-market programs according to investor reports.

Why Did This Happen?

Strategy's Bitcoin-first model has exposed it to significant price volatility. The company's adoption of fair-value accounting in early 2025 caused its earnings to reflect the full swings of Bitcoin's price movements according to industry analysis. In the fourth quarter, Bitcoin fell 24%, contributing to the large unrealized loss as reported in market updates.

The company has continued to purchase Bitcoin despite these losses, reflecting its long-term strategy. Michael Saylor, the company's executive chairman, has argued that Bitcoin volatility is a feature of the model as stated in company commentary.

How Did Markets React?

Strategy's shares fell 48% in 2025, erasing most of the gains from earlier in the year according to market data. The stock is now trading at a 70% discount to its November 2024 peak as reported in financial analysis. Analysts have questioned whether the company's leverage and equity dilution make it a sustainable investment according to financial commentary.

The company's enterprise value is now approaching the market value of its Bitcoin holdings. This has led to speculation that the premium investors once paid for Strategy's model is narrowing as noted in market reports. Peter Schiff, a vocal critic, has argued that the company's performance would disqualify it from inclusion in the S&P 500 according to financial analysis.

What Are Analysts Watching Next?

Investors are closely monitoring whether Strategy can maintain its cash reserves without selling Bitcoin. The company's software business generates limited cash flow, and its reliance on equity issuance has raised concerns about dilution according to market analysis.

The price of Bitcoin in 2026 will also be key. Strategy's updated year-end guidance assumes Bitcoin will trade between $85,000 and $110,000 as reported in financial statements. A sustained rally could reverse the fourth-quarter losses and restore investor confidence as noted in industry reports.

The broader market is also watching whether other companies adopt or abandon Strategy's Bitcoin treasury model. The fourth-quarter selloff in crypto prices has tested the appetite for leveraged crypto exposure through equities as reported in financial analysis.

Strategy's next steps will include continued purchases of Bitcoin and the management of its debt and equity obligations. The company's ability to balance these pressures will define its path in 2026 according to market forecasts.