Strategy (formerly MicroStrategy) reported $5.91 billion in unrealized Bitcoin losses for Q1 2025
The company holds 528,185 Bitcoin worth about $41.3 billion, acquired at an average price of $67,485
Bitcoin price fell below $80,000, trading around $78,200-$79,295 at time of reporting
Strategy warns its analytics software business may not generate enough cash flow to meet financial obligations
The company plans to take on more debt or issue more stock to fulfill its financial commitments
Strategy, formerly known as MicroStrategy, announced on Monday that it does not expect to show a profit for the first quarter of 2025. The company reported $5.91 billion in unrealized losses on its Bitcoin holdings, according to a filing with the Securities and Exchange Commission.
The Tysons, Virginia-based firm said a $1.69 billion tax benefit should partially offset these losses. The company warned in its filing that profitability might remain elusive in future periods, particularly if it continues to face unrealized losses on its digital assets.
Strategy’s Bitcoin holdings remained unchanged over the past week at 528,185 Bitcoin. These holdings are valued at approximately $41.3 billion based on current prices.
Aggressive Buying Strategy
During the first quarter of 2025, Strategy spent $7.7 billion purchasing Bitcoin at an average price of about $95,000 per coin. Between March 24 and March 30 alone, the company acquired 22,048 Bitcoin at an average price of $86,969 per coin, totaling $1.92 billion in purchases.
However, no additional purchases were made during the week of March 31 to April 6. This indicates a pause in Strategy’s aggressive accumulation as the market turned downward.
Since 2020, when Strategy first began investing in Bitcoin, the company has spent a total of $35.6 billion. The average purchase price across all acquisitions is $67,485 per Bitcoin, putting Strategy up approximately 16.5% on its overall investment despite recent losses.
Financial Challenges Ahead
Strategy has taken on $8.2 billion in debt to fuel its Bitcoin purchases. The company has also issued various financial products, including convertible debt and preferred stock.
Between its “Strife” and “Strike” offerings, Strategy must pay $146 million in dividends annually. The company also faces tax liabilities of approximately $2.28 billion related to unrealized gains on its earlier Bitcoin holdings.
Before becoming focused on Bitcoin, Strategy was primarily known for its enterprise analytics software business. However, the company admitted in its filing that this business “has not generated positive cash flow” in recent periods.
Strategy warned that its software business may not help it meet its financial obligations going forward. To address this challenge, the company plans to take on more debt, issue common shares, or conduct additional offerings of preferred stock and convertible debt.
Market Reaction
The cryptocurrency market has experienced a downturn, with Bitcoin trading at around $78,200 at the time of reporting. This represents a five-month low for the leading digital asset.
The recent decline has been attributed in part to U.S. President Donald Trump’s tariff policies, which have negatively impacted risk-on assets. Bitcoin’s price dropped dramatically on Sunday, falling from around $83,000 to below $74,500 overnight before recovering slightly.
In response to Strategy’s announcement, the company’s shares fell 10.6% to $262 on Monday. While this is significantly below last year’s peak of $543, it remains above the Election Day price of $233.
Strategy hasn’t posted a profitable quarter since the fourth quarter of 2023, when it reported earnings per share of $0.32 on $124 million in revenue.
Analysts remain cautiously optimistic about Strategy’s prospects. Those polled by FactSet expect Q1 earnings per share of -$0.11, compared to -$0.31 in the same period last year. Revenue is expected to reach $116.8 million, up slightly from $114.9 million in the previous year.
The company typically announces its quarterly results in late April or early May but has not yet confirmed an exact date for its Q1 2025 earnings report.
Despite the recent volatility, Strategy’s Bitcoin-focused approach continues to define the company’s identity as a proxy for cryptocurrency investment in public markets.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear