Bitcoin Volatility Impacts Strategy Inc.'s Q4 Results
Strategy Inc. Faces Q4 Loss Amid Bitcoin and MSTR Decline
Strategy Inc. is poised to report a substantial fourth-quarter loss as Bitcoin's value plummeted by 24%, accompanied by a sharp decline in MSTR stock during 2025. This downturn erased previous gains and heightened concerns about the firm's Bitcoin-treasury strategy, especially under new fair-value accounting standards.
MSTR Under Pressure as Bitcoin Prices Fall
MSTR shares have dropped 48% in 2025, now standing at about 75% of their November 2024 peak. In a bid to enhance liquidity, the company sold shares in December. Analyst Peter Schiff predicts further declines for MSTR stock in 2026, citing ongoing challenges.
The loss underscores growing skepticism about the sustainability of using Bitcoin as a corporate treasury asset. Strategy Inc. was initially seen as a vehicle for investors to gain Bitcoin exposure through equity markets. However, this approach has faltered with Bitcoin's recent downturn.
According to Bloomberg analysts, Strategy's projected operating performance ranged from a $7 billion loss to a $9.5 billion profit, based on Bitcoin trading between $85,000 and $110,000. With Bitcoin closing the year at around $87,600, the results lean towards the lower end of forecasts.
Investor Confidence in Bitcoin Treasury Erodes
The enterprise value of Strategy Inc. is nearing the value of its Bitcoin holdings, signaling waning investor confidence in the Bitcoin-backed balance-sheet model. Unrealized gains and losses must now be included in reported earnings, highlighting risks for companies that adopted similar strategies.
Notably, Prenetics, associated with David Beckham, has halted its Bitcoin treasury strategy, reflecting a broader lack of confidence in this model. Many companies that accumulated crypto during the bull market are now grappling with paper losses as digital asset prices fall. The Q4 2025 decline exposed the volatility's impact on earnings.
Can Corporate Treasuries Weather Bitcoin Fluctuations?
Michael Saylor remains a steadfast advocate of Bitcoin as a long-term investment, acknowledging its inherent volatility. Strategy Inc. recently added $109 million in Bitcoin to its portfolio, underscoring its commitment despite market swings.
Institutional interest in Bitcoin persists, with the BlackRock Bitcoin ETF among last year's top performers. However, recent market volatility has adversely affected MSTR stock, raising questions about the strategy's viability.
Strategy Inc. is expected to release its 2025 Q4 report soon, which could further shape perceptions of Bitcoin-treasury firms.