Key Notes
- Strategy’s 713,502 bitcoin holdings generated massive paper losses under new fair value accounting rules adopted in early 2025.
- MSTR stock plummeted over 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 obligations despite market turbulence 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 crypto prices tumbled.
The company disclosed 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 paper losses, Strategy added 41,002 bitcoins in January 2026 alone, signaling no retreat from its core accumulation strategy.
The quarterly bloodbath on the income statement reflects Strategy’s adoption of fair value accounting in January 2025, which forces bitcoin’s price fluctuations to flow directly through financial results each period. This marks a dramatic shift from the previous cost-less-impairment model that only recognized downward moves.
Strategy’s stock (MSTR) mirrored 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 over 20% as investors digested both the quarterly loss and continued bitcoin weakness. Analysts have started slashing price targets amid the double whammy of accounting losses and persistent market volatility.
Strategy’s stock (MSTR) plunged 17.12% to $106.99 | Source: Yahoo Finance
Saylor, the company’s Executive Chairman, maintained his long-term conviction stating: “Strategy has built a digital fortress anchored by 713,502 bitcoins and our shift to Digital Credit, which aligns with our indefinite bitcoin horizon.” The holdings carried a market value of $59.75 billion as of February 1st based on a bitcoin price of $83,740—a valuation that looked increasingly disconnected from reality as prices cratered below $63,000 just days later.
STRC Preferred Stock Scales to $3.4 Billion with 11.25% Yield
Strategy expanded its flagship Digital Credit instrument throughout the quarter despite the market turbulence. The STRC (Stretch) preferred stock, which features a variable dividend rate, grew to an aggregate stated amount of $3.4 billion. The current annualized dividend sits at 11.25%, adjusted monthly through a formula designed to anchor the trading price near its $100 par value.
Since launching the instrument, Strategy has paid out $413 million in cumulative distributions to STRC shareholders, representing a blended annual yield of 9.6%. All 2025 distributions qualified as non-taxable return of capital for U.S. tax purposes, a benefit Strategy expects to continue for the foreseeable future—potentially ten years or more—given the company projects zero accumulated earnings for tax calculations.
“STRC (Stretch), our flagship Digital Credit instrument, has grown to $3.4 billion in size, supported by increasing liquidity and declining volatility. Our variable dividend rate mechanism for STRC, currently set at 11.25%, has helped maintain STRC price stability near the $100 stated amount despite a weaker bitcoin price environment,” said Phong Le, the company’s President and CEO.
Throughout 2025, Strategy completed five initial public offerings across different classes of preferred stock, pulling in $5.5 billion in gross proceeds. The company also built what it calls a “USD Reserve” totaling $2.25 billion—enough to cover 2.5 years of dividend obligations and debt interest payments. Chief Financial Officer Andrew Kang emphasized that “Strategy’s capital structure is stronger and more resilient today than ever before,” pointing to how the cash buffer reinforces creditworthiness even as mark-to-market losses pile up.
Bitcoin Plummets Below $63,000 as $2.11 Billion in Leveraged Positions Evaporate
Wednesday’s trading session turned into a bloodbath for crypto markets, compounding Strategy’s problems. Bitcoin
BTC
$63 044
24h volatility:
12.6%
Market cap:
$1.26 T
Vol. 24h:
$138.04 B
tumbled from near $73,3400 to an intraday low of $62,345—the weakest level since November 2025. The hourly chart shows relentless selling that shattered every intermediate support level, with prices shedding over $25,000 from the three-month highs. The daily decline topped 12.80%, trapping countless investors in underwater positions and triggering cascading liquidations across derivatives markets.
Bitcoin crash from $73,3400 to $62,345 | Source: TradingView
According to CoinGlass data, 433,413 traders got liquidated across all cryptocurrencies over the past 24 hours, wiping out $2.11 billion worth of positions. Bitcoin alone accounted for $1.15 billion in forced liquidations as of this writing, as exchanges automatically closed out leveraged bets that couldn’t meet margin requirements. Long positions—bets on rising prices—bore the brunt of the damage, illustrating how many traders were caught leaning the wrong way when the floor gave out.
Liquidation heatmap and total liquidations as of February 5, 2026 | Source: CoinGlass
The carnage raises uncomfortable questions about Strategy’s positioning. While the company maintains a “hodl” mentality with zero leverage on its bitcoin stack, the equity holders face the volatility whiplash anyway. Strategy achieved a 22.8% BTC Yield (a metric measuring bitcoin accumulation per share) during fiscal 2025, hitting its targeted range of 22.0% to 26.0%. But that mathematical success feels hollow to MSTR shareholders watching their stock crater alongside crypto prices, despite the company raising $25.3 billion during the year to become America’s largest equity issuer for the second consecutive year.
As of this writing, bitcoin trades at $63,026, down 2.51% over the last 24 hours.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Marco is a passionate journalist with a deep addiction to cryptocurrencies and a keen interest in photography. He is fascinated by trading and market analysis. He has 5+ years of experience working with cryptocurrency projects.
