Strategy, the largest Bitcoin treasury company, reported quarterly results that fell well short of expectations, as the cryptocurrency's sharp reversal translated into massive, unrealized accounting losses. Its shares plunged.
Strategy Posts $12.6bn Quarterly Loss as Bitcoin's Slide Hits Earnings
6 February 2026 - 00:03 CET
By Ana Pereira
The firm posted a net loss of $12.6bn, or $42.93 per share, compared with expectations for a loss of roughly $19.03 per share, according to analyst estimates tracked by Seeking Alpha. The miss was driven almost entirely by the decline in the price of Bitcoin during the quarter, rather than a deterioration in Strategy’s core operations.
Earnings revealed a roughly $14bn decline in the market value of its Bitcoin holdings during the fourth quarter.
Bitcoin volatility amplifies Strategy’s downturn
The company, formerly known as MicroStrategy, is led by Michael Saylor, a pioneer in digital asset treasuries. He has been regularly on the road in recent months reminding his shareholders, and others, of his conviction that while he expects the coin to go up his firm will be able to manage to manage the down periods.
The stock fell as much as 19% since Wednesday's Nasdaq market close as investors started to digest the figures and as a steep sell-off in digital assets renewed pressure on corporate crypto balance sheets. Its decline since last year's high point in July extended to 77%.
This downward spiral is closely tied to the volatility of its Bitcoin holdings. The cryptocurrency slid nearly 14% over the past 24 hours, extending its recent downturn and trading near $63,000, a level that materially worsens the mark-to-market position of corporate holders such as Strategy.
Balance sheet scrutiny
The drawdown has intensified the scrutiny of Strategy’s balance sheets. While the company began accumulating bitcoin at significantly lower prices, the scale of its holdings means Bitcoin price volatility now has a direct and amplified impact on its financing flexibility.
On 1 Feb, Strategy disclosed total Bitcoin holdings of 713,502 acquired at a total cost of $54.26bn, largely funded through debt. With bitcoin trading near $63,000, the market value of those holdings has fallen to roughly $44.9bn, wiping out more than $9bn in paper value in a matter of weeks.
Strategy’s ability to service its debt rests less on near-term Bitcoin price moves than on liquidity buffers and relatively low leverage, executives said on the company’s latest earnings call.
Chief Financial Officer Andrew Kang said the firm ended 2025 with a $2.25bn cash reserve, providing “over two and a half years of interest and dividend coverage” against roughly $888 million in annual obligations, while total long-term debt stood at $8.2bn.
"No issues" servicing debt
The company's CEO Phong Le pushed back on concerns that falling Bitcoin prices could trigger stress, noting that Strategy has “no covenants or triggers” tied to Bitcoin trading below its average purchase price and “no issues servicing our debt or paying the dividends on our preferreds.” He added that even under extreme downside scenarios, leverage remains modest, describing the company as “not a highly levered company,” with net leverage around 10–13%, well below typical levels for investment-grade corporates.
