In a challenging financial landscape, Strategy has reported a significant widening of its fourth-quarter loss, primarily due to the tumultuous state of digital assets. The company, known for being the largest holder of bitcoin worldwide, faced losses on its holdings as the cryptocurrency market grappled with instability.
Following the release of its quarterly report, shares of the company, led by Michael Saylor, fell by 1.5% in after-hours trading, compounding earlier losses that have driven the stock down nearly 30% since the beginning of the year.
In December, Strategy had already downgraded its earnings forecast for 2025, attributing the bleak outlook to a downturn in bitcoin prices. At that time, the company revealed intentions to establish a reserve for supporting dividend payments, a strategic move aimed at navigating the unpredictable market. The previous estimate expected bitcoin to reach $150,000 by year-end.
For much of 2025, the cryptocurrency sector, particularly bitcoin, had experienced a favorable environment fueled by regulatory support and institutional investments. However, since a record crash in October that saw bitcoin’s value nearly halved from its peak on October 6, the market has been characterized by volatility and uncertainty, leading to significant liquidations of leveraged positions.
As of February 1, Strategy reported a staggering loss of $12.4 billion, equating to $42.93 per share for the final quarter of 2024, a stark contrast to the $670.8 million loss or $3.03 per share recorded in the same period the previous year. The company currently holds 713,502 bitcoins with a total acquisition cost of $54.26 billion, which translates to approximately $76,052 per bitcoin.
Despite these challenges, Saylor expressed optimism regarding regulatory developments and the potential for increased corporate adoption of cryptocurrencies. During a post-earnings conference call, he emphasized the impact of actions taken by major financial institutions and regulators, stating, “The actions by big finance, the actions by the big banks and the actions by the financial regulators are the fundamentals.”
Recent data indicated that U.S. spot bitcoin exchange-traded funds (ETFs) experienced significant outflows, with approximately $2 billion in December and $7 billion in November, as reported by analysts at Deutsche Bank. This selling pressure intensified following the nomination of Kevin Warsh as the next Federal Reserve chair, a move that analysts believe could lead to a contraction of the Fed’s balance sheet—an outcome seen as unfavorable for risk assets, including cryptocurrencies.
When questioned about the implications of Warsh’s nomination on financial policy, Saylor remarked, “It’s above our pay grade to set financial policy. It’s even above our pay grade to interpret the financial policy.”
In 2025, Strategy’s stock has notably dropped by around 47.5%, mirroring a 6.4% decline in bitcoin prices, underscoring the company’s high exposure to the cryptocurrency market. As uncertainty looms over the industry, investors remain vigilant about the future trajectory of digital assets.
