Strategy Inc. Faces $12 Billion Quarterly Deficit Amid Bitcoin Downturn

A staggering quarterly loss has placed significant pressure on Strategy Inc., as a major bet on Bitcoin backfires. The recent depreciation in the cryptocurrency's market value has resulted in deep losses on the company's balance sheet. Management is attempting to reassure stakeholders amidst fundamental criticism of its business approach, yet the stock's extreme volatility persists.

Market reaction to the earnings report was severe. The share price closed at €89.42 on Thursday, marking a substantial single-day decline. By Friday morning, however, early indicators pointed to a tentative recovery attempt of 6 to 7 percent in pre-market trading, coinciding with a stabilization in the broader crypto market. Despite this potential bounce, the equity remains down nearly 70 percent over a 12-month horizon.

The core of the financial turmoil is a massive impairment charge on the firm's digital asset holdings. Strategy Inc. reported holding 713,502 Bitcoin, acquired at an average cost of $76,052 per coin. With the market price falling substantially below this entry point, a significant valuation gap has emerged between the purchase cost and current worth.

The accounting consequence is devastating: for the fourth quarter of 2025, the company posted a net loss estimated between $12.4 and $12.6 billion. While these non-cash impairment charges do not affect liquidity, they severely impact the balance sheet's appearance and underscore the risks of a concentrated focus on digital assets.

Should investors sell immediately? Or is it worth buying Strategy?

Leadership and Critics Clash Over Strategy

In the face of these alarming figures, CEO Phong Le has forcefully dismissed concerns about the company's viability. He emphasized on Friday that Strategy Inc. maintains adequate financial buffers. According to his statement, the price of Bitcoin would need to fall to approximately $8,000 before the value of the company's reserves would only cover its net debt—a scenario he described as far below current market levels.

These assurances have met with skepticism from notable critics. Andrew Left, founder of Citron Research, launched a sharp attack following the earnings release. He characterized the multi-billion dollar loss as a critical flaw in the business model and questioned the validity of the "Bitcoin Reactor" label the company often uses.

Financial Snapshot

• Q4 2025 Net Loss: Approximately $12.4 billion
• Bitcoin Holdings: 713,502 BTC
• Average Purchase Price: $76,052 per Bitcoin
• Stock Performance: High volatility following earnings release

The future financial condition of Strategy Inc. remains inextricably linked to the price trajectory of Bitcoin. As long as the cryptocurrency trades below the company's average purchase price, accounting losses will continue to weigh on reported results. Investors should anticipate that the stock will likely remain highly sensitive to the volatile crypto markets in the weeks ahead.