• Strategy Inc. is expected to report a multibillion-dollar fourth-quarter loss after Bitcoin fell 24%, reversing a $2.8 billion profit in the prior quarter.
  • The loss reflects unrealized declines in the value of the company's roughly $60 billion Bitcoin holdings under new fair-value accounting rules.
  • Investor sentiment toward the Bitcoin-treasury model weakens as shares fell 48% in 2025 and enterprise value nears parity with Bitcoin holdings.

Strategy Inc., the technology firm that rebranded from MicroStrategy to position itself as the world's first and largest Bitcoin Treasury Company, is bracing for a significant financial hit. According to people familiar with the matter, the company is projected to report a multibillion-dollar loss for the fourth quarter of 2025, driven by Bitcoin's 24% decline during the period. This stark reversal from a $2.8 billion profit in the third quarter underscores the volatility amplified by fair-value accounting rules adopted in early 2025, which require marking its approximately 672,497 BTC holdings to market prices.

The expected loss comes amid growing skepticism around the sustainability of the Bitcoin-treasury model. Strategy's shares have plummeted 48% in 2025 and are nearly 70% below their November 2024 peak, raising concerns about the company's ability to fund dividends and cover interest costs. In December, the company moved to bolster liquidity by selling shares, building a $1.44 billion reserve intended to cover 12 months of obligations. With Bitcoin ending the year near $87,600, full-year operating results are likely to skew toward the lower end of the projected range—from a $7 billion loss to a $9.5 billion profit, based on Bitcoin prices between $85,000 and $110,000.

Efforts to maintain stability have hit a snag as the company's enterprise value approaches parity with its Bitcoin holdings, highlighting investor doubts. Without a sustained recovery in Bitcoin prices, Strategy could face liquidity crunches, potentially forcing sales of its BTC assets. Analysts note that the mNAV discount signals underlying fears, with some questioning whether the model can withstand prolonged market downturns.

Michael Saylor, who remains Executive Chairman, has previously championed the strategy, but recent developments have prompted a more cautious tone from some quarters. Phong Le, President and CEO, emphasized in a recent statement that the company is focused on long-term value, though attempts to reach out for further comment on the Q4 outlook were unsuccessful. The broader crypto market's volatility continues to erode confidence, with ripple effects potentially impacting other corporate Bitcoin treasury strategies.

As the earnings report looms, all eyes are on Bitcoin's trajectory in early 2026. A quick rebound could stabilize the situation, but prolonged declines might force a reassessment of the treasury model's viability. For now, Strategy Inc. navigates a precarious balance, with its fortunes tightly tethered to the digital asset it has so heavily bet on.

Correction: An earlier version misstated the average acquisition cost of Bitcoin; it is $75,004 per BTC.