After a turbulent fourth quarter, Strategy Inc. (MSTR) finds itself reeling from a staggering $12.4 billion net loss, largely driven by a dramatic drop in Bitcoin’s price. This hefty loss comes as Bitcoin fell 22% during the last quarter of 2025, plummeting from a peak of $126,000 to just under $88,500 by year’s end.
Compounding the challenges, the cryptocurrency f6d0has continued its downward trajectory into 2026, trading around $64,500 currently, significantly under Strategy’s average purchase price of $76,052 for its holdings. Currently, the company possesses 713,502 Bitcoin, valued at approximately $46 billion, reflecting a significant paper loss of 17.5% based on their entry costs.
Following the release of its financial report, shares of Strategy saw a steep decline. On Thursday, the stock dropped 17%, closing at $107, as Bitcoin dipped to $62,500 before making a slight recovery in after-hours trading.
Despite the grim headlines, certain aspects of Strategy’s business appear resilient. For Q4, the company managed to improve its core business intelligence revenues by 1.9% year-over-year, achieving $123 million. However, these gains are marginal compared to the financial impact of Bitcoin losses.
Management Dismisses Panic
In response to investor concerns, Strategy’s CFO Andrew Kang emphasized the robustness of the company’s capital structure, declaring it “stronger and more resilient today than ever before.” He referred to the company’s Bitcoin holdings as its “digital fortress” while mentioning a shift towards what is termed ‘Digital Credit’—an initiative aligned with the company’s long-term Bitcoin strategy.
CEO Phong Le echoed this sentiment during the earnings call, reassuring investors, “I’m not worried, we’re not worried, and no, we’re not having issues.” He pointed out that the enterprise value of Strategy still exceeds its substantial Bitcoin reserve, indicating confidence in their financial position.
With $8.2 billion in convertible debt, which reflects only 13% net leverage—significantly lower than the leverage ratios seen in most S&P 500 companies—Le sought to quell apprehensions regarding the company’s debt load.
Cash Position Provides Buffer
Adding to the positive outlook, Strategy concluded the fourth quarter boasting $2.25 billion in cash reserves. This buffer is sufficient to cover 30 months’ worth of preferred stock dividends. Moreover, with no major debts coming due until 2027, the company is well-positioned to weather the current market storm without being forced into liquidating Bitcoin holdings at unfavorable prices.
This strategic positioning allows Strategy the luxury of time as it navigates the ongoing Bitcoin downturn. Executive Chairman Michael Saylor has consistently emphasized the company’s commitment to holding Bitcoin for the long haul, a strategy that could prove beneficial if market conditions improve.
Recently, Strategy has ramped up its Bitcoin acquisitions, purchasing several billion dollars worth post-Q4, which has raised the average purchase price to around $76,052. This price stands about $11,500 above Bitcoin’s current trading level.
Given the current circumstances, investors are keenly awaiting the upcoming 5 PM ET earnings call for further insights from Saylor and the management team regarding the future course amid fluctuating market conditions.
