Michael Saylor has spent years telling investors that Bitcoin volatility is part of the deal. He once called it “a feature, not a bug” while pitching Strategy as the most aggressive corporate Bitcoin holder in the public market.
That pitch is about to meet its biggest test yet, as the company prepares to report a multibillion‑dollar loss for Q4 after Bitcoin saw a 24% crash.
The expected hit marks a sharp reversal from the prior quarter, when Strategy booked a $2.8 billion profit. This time, the numbers move the other way.
The loss is tied to an unrealized markdown on the company’s roughly $60 billion Bitcoin stash, whose value dropped fast as crypto prices fell late in the year. The swing is large, and investors are already bracing for it.
Strategy’s accounting change exposes the full effect of Bitcoin’s drop
Cryptopolitan previously reported that Strategy changed how it logged its crypto holdings in Q1 2024 when the company began valuing its Bitcoin at current market prices, rather than keeping it at cost.
That naturally makes earnings far more sensitive to price moves, especially during sharp selloffs like the one seen in the fourth quarter.
Bitcoin fell 24% over that period. That single move explains why the coming loss looks so heavy. Aaron Jacob, an associate professor at Brigham Young University and a senior adviser at Taxbit, put it plainly. “There was this one-time pop, but that is a different story in this quarter,” Jacob said. “It is going to be a sizable loss.”
The timing matters. Strategy, once known as MicroStrategy, reinvented itself years ago as a leveraged Bitcoin proxy. That approach paid off for a while. The stock beat major indexes after the shift. But sentiment turned in 2025. The shares fell 48% during the year, signaling growing doubts about the treasury‑heavy model Saylor built more than five years ago.
Falling equity prices also raised practical concerns. Bitcoin produces no income. The company’s software unit brings in limited positive cash flow. Investors began to question how Strategy would cover future costs like dividends and interest payments without selling Bitcoin. To ease that pressure, the company raised cash on Dec. 1 by selling common shares and building a reserve.
Strategy juggles guidance, balance sheet pressure, and fading premium
At the start of last month, Strategy updated its full‑year outlook using a Bitcoin price range of $85,000 to $110,000 by year‑end. Based on that range, the company projected operating income anywhere from a $7 billion loss to a $9.5 billion profit. Bitcoin finished the year down 6.5%, closing at $87,648, pushing expectations closer to the lower end of that range.
Saylor’s crypto movement is no longer unique, as you should know, because in 2024, many public companies copied the Strategy playbook to attract investors seeking stock‑based crypto exposure.
Some surged early, then sank as prices rolled over. Tommy Lee‑backed BitMine Immersion Technologies followed that path and now faces the same fair‑value accounting rules.
Bitcoin’s crash also hit Saylor personally, as his net worth fell about 40% in 2025 to roughly $3.8 billion, according to the Bloomberg Billionaires Index.
Another pressure point is Strategy’s enterprise value, which includes debt and perpetual preferred stock, stood at $61 billion, which is close to the value of its Bitcoin holdings and risks slipping below it for the first time in more than two years.
The stock has dropped by nearly 70% from its November 2024 peak, dragging the company’s mNAV to just above 1 and wiping out most of the premium investors once paid for Strategy exposure.
But on the first trading day of 2026, Strategy stock has surged by 5.2% as of press time to around $160, while Bitcoin has rallied 2.6% to $90,549.
Join Bybit now and claim a $50 bonus in minutes
