Michael Saylor’s Strategy (MSTR), formerly MicroStrategy, is an enterprise software company turned Bitcoin treasury powerhouse. Yesterday, Strategy reported an unrealized loss of $17.44 billion in Q4 2025 as Bitcoin (BTCUSD) prices fell 25% in the December quarter. The loss marks a sharp turnaround from the $3.9 billion unrealized profit the strategy reported in the third quarter. It highlights the extreme volatility inherent in the company’s Bitcoin-focused strategy.
Under new accounting standards adopted in the first quarter of 2025, Strategy must value its Bitcoin holdings at fair value each quarter. This creates massive swings in reported earnings that follow the price movements of the cryptocurrency.
MSTR shares fell 53% in the fourth quarter and are down 66% from their all-time highs, as investors face growing concerns about its ability to service debt and pay dividends without generating significant cash flow. The strategy was quick to address liquidity fears, establishing a $2.19 billion cash reserve funded through stock sales. However, even as Strategy braces for its massive paper loss, it doubled down on Bitcoin, purchasing $116.3 million worth of the cryptocurrency in early January.
While Strategy owns around $60 billion in BTC, the stock trades at a market capitalization of $47 billion. Let’s see if you should own MSTR stock right now.
Investors are concerned about Michael Saylor’s fragile and risky Bitcoin treasury strategy. Last month, it established a cash reserve of $1.44 billion to cover dividend payments and interest obligations. The defensive move indicates that Saylor is concerned about the entity’s ability to meet its financial commitments without selling its prized Bitcoin holdings. By the end of 2025, the cash cushion covered 21 months of payments.
Strategy owns over 3% of the total BTC supply that will ever exist, making it the largest institutional holder of the digital asset. When Strategy issued guidance in October, analysts assumed Bitcoin would reach $150,000 by the end of the year. The reality was much harsher. Bitcoin fell from $111,612 in late October to as low as $80,660 in late November, prompting the company to cut its year-end price assumptions to a range of $85,000 to $110,000.
