Key Notes
- The strategy’s 713,502 bitcoin holdings generated massive paper losses under new fair value accounting rules adopted in early 2025.
- MSTR stock fell more than 20% as the digital asset crashed from $73,340 to $62,345 in a single trading session.
- The company maintains $2.25 billion in reserves covering 2.5 years of bonds despite market turmoil and liquidations.
Michael Saylor’s Strategy Inc. posted a staggering $12.4 billion net loss for the fourth quarter of 2025, driven almost entirely by unrealized losses on its Bitcoin treasury as cryptocurrency prices fell.
The company revealed on Wednesday that it now holds 713,502 bitcoins acquired at a total cost of $54.26 billion, representing an average purchase price of $76,052 per coin. Despite the losses on paper, Strategy added 41,002 bitcoins in January 2026 alone, signaling no withdrawal from its core accumulation strategy.
Strategy announces its fourth quarter 2025 results:
– 713,502 $BTC detained
– 22.8% BTC yield in 2025
– Largest US equity issuer, raised $25.3 billion in 2025
– $STRC increased to $3.4 billion; Current dividend rate of 11.25%-Michael Saylor (@saylor) February 5, 2026
The quarterly P&L bloodbath reflects Strategy’s adoption of fair value accounting in January 2025, forcing fluctuations in the price of Bitcoin to reflect directly in each period’s financial results. This marks a radical change from the previous model of costless depreciation and which only took downward movements into account.
Strategy (MSTR) stock reflected the pain, plunging 17.12% to close at $106.99 on Wednesday before sliding further to $103.14 in after-hours trading — a combined drop of more than 20% as investors digested both the quarterly loss and Bitcoin’s continued weakness. Analysts have begun slashing their price targets, facing the double whammy of accounting losses and continued market volatility.
Strategy (MSTR) stock plunged 17.12% to $106.99 | Source: Yahoo Finance
Saylor, executive chairman of the company, maintained his long-term conviction, saying: “The strategy has built a digital fortress anchored by 713,502 bitcoins and our transition to digital credit, which aligns with our indefinite bitcoin horizon. » The holdings had a market value of $59.75 billion as of February 1, based on a bitcoin price of $83,740, a valuation that seemed increasingly out of touch with reality as prices fell below $63,000 days later.
STRC Preferred Stock Hits $3.4 Billion with 11.25% Yield
Strategy expanded its flagship digital credit instrument throughout the quarter despite market turbulence. STRC (Stretch) preferred shares, which feature a variable dividend rate, reached a total declared amount of $3.4 billion. The current annualized dividend stands at 11.25%, adjusted monthly through a formula designed to anchor the trading price near its par value of $100.
Since the instrument’s launch, Strategy has paid $413 million in cumulative distributions to STRC shareholders, representing a blended annual return of 9.6%. All 2025 distributions were considered a tax-free return of capital for U.S. tax purposes, a benefit the strategy expects to continue for the foreseeable future – potentially ten years or more – given that the company projects zero accumulated profit for tax calculations.
“STRC (Stretch), our flagship digital credit instrument, has reached a size of $3.4 billion, supported by increasing liquidity and decreasing volatility. Our variable dividend rate mechanism for STRC, currently set at 11.25%, has helped keep the price of STRC stable near the reported amount of $100 despite a weaker bitcoin price environment,” said Phong Le, President and CEO of the company.
Throughout 2025, Strategy completed five IPOs in various classes of preferred stock, generating $5.5 billion in gross proceeds. The company has also built up what it calls a “U.S. dollar reserve” totaling $2.25 billion, enough to cover 2.5 years of dividend obligations and debt interest payments. CFO Andrew Kang highlighted that Strategy’s “capital structure is stronger and more resilient than ever today”, highlighting how the cash cushion strengthens solvency even as mark-to-market losses accumulate.
Bitcoin Falls Below $63,000 as $2.11 Billion Leveraged Positions Evaporate
Wednesday’s trading session turned into a bloodbath for crypto markets, compounding Strategy’s problems. Bitcoin
BTC
$70,779
24h volatility:
1.8%
Market capitalization:
$1.42T
Flight. 24h:
$39.96 billion
fell from near $73,3400 to an intraday low of $62,345, the weakest level since November 2025. The hourly chart shows relentless selling that broke all intermediate support levels, with prices losing more than $25,000 from three-month highs. The daily decline exceeded 12.80%, trapping countless investors in underwater positions and triggering cascading liquidations in derivatives markets.
Bitcoin Crash from $73,3400 to $62,345 | Source: TradingView
According to CoinGlass data, 433,413 traders liquidated across all cryptocurrencies in the last 24 hours, wiping out $2.11 billion in positions. Bitcoin alone accounted for $1.15 billion in forced liquidations as of this writing,
Heat map of liquidations and total liquidations as of February 5, 2026 | Source: CoinGlass
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Marco is a passionate journalist, deeply addicted to cryptocurrencies and passionate about photography. He is fascinated by trading and market analysis. He has over 5 years of experience in the field of cryptocurrency projects.
