Bitcoin Crash Wipes $12.4B From Strategy in Brutal Fourth Quarter
Strategy posted a massive fourth-quarter loss as falling Bitcoin prices wiped billions from the value of the company’s digital-asset holdings.
The firm reported a net loss of $12.4 billion for the fourth quarter of 2025 after Bitcoin’s price slid sharply during the period. The cryptocurrency dropped from roughly $120,000 at the start of October to about $89,000 by year-end, erasing a large portion of the gains accumulated earlier in the cycle.
Market conditions have deteriorated further in early 2026. Bitcoin fell sharply in recent weeks and also dipped below the $64,000 level on Thursday, just ahead of Strategy’s earnings release.
BTC price (Source: CoinGecko)
The decline weighed heavily on investor sentiment, with Strategy’s shares closing the session down 17% in one of their steepest single-day drops in years. The stock saw only a modest rebound in after-hours trading.
Bitcoin Treasury Strategy Under Pressure
Led by Executive Chairman Michael Saylor, Strategy has become the largest corporate holder of Bitcoin, transforming itself from a traditional enterprise-software company into a leveraged proxy for the cryptocurrency market.
As of the latest update earlier this week, the firm holds 713,502 BTC acquired at an average price of $76,052 per coin.
That figure includes several billion dollars in additional purchases made after the end of the fourth quarter.
However, the recent downturn has pushed Bitcoin below the company’s average cost basis, placing its holdings into an unrealized loss position. This has heightened scrutiny of Strategy’s balance sheet and capital structure, which relies heavily on debt and preferred stock issued to fund its Bitcoin acquisitions.
Despite the losses, the company finished the year with $2.25 billion in cash. According to management, that liquidity position is sufficient to cover roughly two and a half years of dividend payments on its preferred stock, as well as interest obligations on outstanding debt.
Investors Focus on Saylor’s Next Move
While the quarterly loss was largely expected due to Bitcoin’s price decline, analysts and shareholders are now turning their attention to management’s forward guidance. The earnings call scheduled for later in the day is expected to focus on the company’s strategy in the face of the current market downturn.
Saylor has historically treated price corrections as opportunities to accumulate more Bitcoin, arguing that long-term adoption trends outweigh short-term volatility. The company has repeatedly issued new debt and equity instruments during previous bear markets to increase its holdings, a strategy that amplified gains during bull runs but also magnified losses during downturns.
With Bitcoin now trading below Strategy’s average acquisition cost, investors are watching closely to see whether the firm maintains its aggressive buying stance or shifts toward a more defensive posture to protect its balance sheet.
Corporate Bitcoin Bet Faces Test
Strategy’s results highlight the broader impact of crypto market swings on corporate treasuries that have adopted Bitcoin as a reserve asset. While the company benefited enormously during previous rallies, the latest correction demonstrates how quickly paper gains can reverse when sentiment turns.
The company remains deeply tied to Bitcoin’s price trajectory, and its financial performance is likely to continue reflecting the cryptocurrency’s volatility. For now, the focus remains on whether management views the current downturn as another accumulation opportunity or a signal to adjust its strategy.
