Quarterly Loss of $12.4 Billion: Why Can’t It Stop Strategy from Frantically Buying Bitcoin?
MicroStrategy (now Strategy) reported a staggering net loss of $12.4 billion in Q4 2025, primarily due to the adoption of a new fair value accounting standard that required marking its holdings to market amid Bitcoin’s sharp decline to around $65,000. Despite the loss, the company aggressively expanded its Bitcoin position, purchasing an additional 41,002 BTC in January 2026, bringing its total holdings to 713,502 BTC — approximately 3.4% of Bitcoin’s total supply — with an average cost of $76,052 per coin.
The firm’s core software business, though profitable with $123 million in Q4 revenue, was overshadowed by its Bitcoin-centric strategy. Strategy raised over $25.3 billion in capital during 2025, leveraging financial instruments to amplify its Bitcoin exposure. It maintains $2.25 billion in cash reserves to cover dividends and interest for 2.5 years.
CEO Phong Le acknowledged risks, stating that if Bitcoin fell to $8,000, the company might need to restructure debt rather than sell BTC. The firm’s "Bitcoin flywheel" model relies on continuous capital raising and BTC appreciation, but compressed mNAV (1.07) and high-yield preferred shares (STRC, 11.25% dividend) reflect market skepticism. A prolonged downturn could trigger a negative feedback loop: falling BTC value → reduced ability to raise capital → potential forced BTC sales.
Executive Chairman Michael Saylor emphasized long-term optimism, citing supportive U.S. policy and institutional adoption, while downplaying quantum computing risks as a decade away. Strategy remains a high-risk, high-reward bet on Bitcoin’s future.
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