In a challenging first quarter of 2026, Strategy (MSTR) reported a jaw-dropping net loss of $12.54 billion, a substantial blow credited mainly to a $14.46 billion unrealized markdown on its bitcoin holdings. As the cryptocurrency landscape fluctuated, bitcoin’s price tumbled from approximately $87,000 to around $68,000 during the quarter, driving the colossal loss for the company.
Despite this setback, the MSTR stock managed to climb to $190—its highest level since mid-November—before experiencing a slight dip of 1% in after-hours trading. The stock is up nearly 20% year-to-date; however, it still grapples with a year-over-year decline of more than 50%.
As of the end of the quarter, Strategy held a staggering 818,334 BTC, purchased at an average cost of $75,537 per coin. At bitcoin’s current price near $81,000, this cache is now worth approximately $66.82 billion, leaving the company with an unrealized gain of about $5 billion despite the losses reported this quarter.
Company executives, led by Executive Chairman Michael Saylor, remain optimistic as Strategy ended Q1 with $2.25 billion in cash, sufficient to cover about 18 months of preferred stock dividends. This solid cash position offers some buffer against the volatility seen in both bitcoin prices and overall market conditions.
STRC: A Beacon Amidst the Turmoil
One glimmer of hope for Strategy has been the performance of its preferred stock, STRC. CEO Phong Le described it as a “big success,” highlighting strong demand and liquidity, with an adjustable dividend currently set at an attractive annual yield of 11.5%. This stock has helped raise a noteworthy $5.58 billion year-to-date, constituting a significant portion of the company’s total $11.68 billion fundraising efforts in 2026.
With Strategy aiming to turn its operations around, STRC has become a pivotal funding tool, allowing the company to continue its strategy of acquiring more bitcoin. Despite facing criticism for their approach—some labeling it a circular model or even a Ponzi scheme—others argue it provides a valid channel for yield-seeking capital in the bitcoin market. Notably, Grayscale analysts suggest that spot bitcoin ETFs may remain the cleanest means of gaining bitcoin exposure without getting entangled in complex preferred stock structures.
Hope on the Horizon: Bitcoin’s Rebound
As the calendar turns to Q2, there’s renewed hope for Strategy as bitcoin has recently rebounded above $80,000, prompting the company to continue its bitcoin purchases during this uptick. If this momentum persists, the outlook for the April-June quarter could dramatically improve, potentially leading to a significant turnaround from the losses experienced in Q1.
Investor attention is now sharply focused on the upcoming earnings call scheduled for 5 p.m. ET, where Saylor and his team will outline their strategic steps moving forward. In the realm of cryptocurrency, where fortunes can shift rapidly, the recovery of bitcoin’s price will be crucial for Strategy’s immediate future.
