Strategy’s Bitcoin Holdings Face Challenges Amid Market Decline

As of February 1, Strategy reports holding 713,502 BTC valued at around $59.75 billion, reflecting unrealized losses due to Bitcoin’s price drop to approximately $60,000, below their average cost of $76,052 per BTC.

Treasury Under Strain

In 2025, Strategy achieved a BTC yield of 22.8% and accrued gains of 101,873 BTC. They continued to grow their treasury with an additional 41,002 BTC purchased in January 2026.

Originally founded as a software firm in 1989, Strategy rebranded and embraced Bitcoin as a treasury asset in 2020 under co-founder Michael Saylor’s guidance. Their rapid pivot has faced scrutiny from regulators, especially regarding their classification as a publicly traded company primarily tied to crypto assets.

Despite regulatory challenges, Strategy integrates Bitcoin into its financial framework, utilizing it for capital raising and addressing shareholder interests. Their attempt to gain entry into the S&P 500 was denied last year.

The recent downturn in Bitcoin prices, notably highlighted by investor Michael Burry, raises questions regarding the sustainability of companies heavily invested in crypto. Burry posits that sustained price declines could severely impact firms like Strategy.

Losses Surge in Q4

In the last quarter, Strategy reported operating losses of $17.4 billion, attributed entirely to unrealized digital asset losses, contrasting with a $1.0 billion loss in Q4 2024. Their net loss surged to $12.4 billion from $670.8 million, even as cash reserves climbed significantly, driven by their USD Reserve.

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