Strategy Inc., the Michael Saylor-led bitcoin accumulator formerly known as MicroStrategy, posted an approximately $14.5 billion unrealized loss in the first quarter as the value of its cryptocurrency holdings plunged, the company disclosed Monday. The hit reflects a more than 20% drop in bitcoin during the quarter — the biggest first-quarter decline for the asset since 2018 — and comes as Strategy continues to add to its stash even while markets swing sharply.
According to a U.S. Securities and Exchange Commission filing, Strategy held more than $50 billion of bitcoin at quarter-end and bought 4,871 bitcoin between April 1 and April 5 for about $330 million, at an average price of roughly $67,700 per coin. Those purchases were funded through sales of Class A common stock and at‑the‑market sales of the company’s so‑called Stretch preferred shares, the filing said. Bitcoin traded near $70,000 on Monday before trimming gains.
The company’s accounting choices are amplifying headline swings in results. Strategy adopted accounting standards last year that require changes in the fair value of its bitcoin holdings to flow through earnings, meaning unrealized price moves generate multibillion‑dollar swings in quarterly profitability. The steep price slide pushed the value of the company’s holdings below their average purchase price — reported at more than $75,000 per bitcoin by quarter‑end — producing the large unrealized loss.
Although the bitcoin markdown dominated the quarter, Strategy reported a $2.42 billion deferred tax benefit, and maintains a cash reserve of about $2.25 billion, which the company says is enough to cover interest and distributions for more than two years. Nevertheless, sustaining the firm’s capital‑intensive model depends on bitcoin appreciating faster than the company’s growing financing costs and obligations compound, analysts say.
Strategy has shifted its approach to funding bitcoin purchases as market conditions evolve. At times when the company’s shares traded at a premium to the underlying value of its holdings, it issued common stock to finance further bitcoin buys. With that premium largely gone and capital markets tighter, executive chairman Michael Saylor has increasingly leaned on the firm’s Stretch preferred securities introduced in 2025. Those perpetual preferreds — part of a program the company last month said could include up to $21 billion of common stock and $21 billion of perpetual preferred shares offered through open‑market sales — carry an 11.5% annual yield that resets monthly and are designed to maintain a $100 par value.
Issuing preferreds allows Strategy to avoid immediate dilution of common shareholders but adds fixed financing obligations. The trade‑off underscores the risk in the company’s repeated play: selling securities to buy bitcoin only works if the digital asset’s future gains outpace the costs of financing those purchases. The latest filing shows Strategy is continuing to pursue that strategy even as volatility returns to crypto markets.