Strategy Inc. reported an unrealized loss of $17.44 billion on its digital-asset holdings for the fourth quarter of 2025 in the company’s SEC filing. The loss followed a 24% drop in Bitcoin during the quarter and a 6% decline for full-year 2025, materially reshaping the quarter’s profit-and-loss profile under new accounting rules.
The scale matters because Strategy remains decisively Bitcoin-weighted: as of Jan. 4, 2026, the company held 673,783 BTC with an approximate market value of $62 billion. With market sentiment shifting and index-exposure questions intensifying, the size of that position sets the tone for how investors interpret volatility.
Why the Accounting Result Looked So Large
Strategy attributed the swing to the interaction of Bitcoin price movements and the adoption of ASU 2023-08, which requires marking its Bitcoin inventory to market. Under mark-to-market treatment, the quarter’s price decline flowed straight into an unrealized loss on the income statement.
The filing also recorded a $5.01 billion deferred tax benefit in Q4, which partially offset the reported volatility. That tax benefit reduced the net impact, but it did not change the core driver: Bitcoin’s price move now transmits directly through reported earnings.
For full-year 2025, the company reported a cumulative unrealized loss of $5.40 billion on digital assets, described as a reversal from a $2.8 billion profit in Q3 2025. Strategy also confirmed in its SEC filing that it recorded “an unrealized loss of $17.44 billion on digital assets for the fourth quarter.”
Despite the accounting hit, Strategy continued to acquire Bitcoin, purchasing 1,286 BTC for roughly $116.3 million between Dec. 29, 2025 and Jan. 4, 2026. To preserve operational liquidity without selling Bitcoin, the company funded a $2.25 billion USD reserve through the sale of common shares. Management said the cash is intended to service preferred-stock dividends and interest on outstanding debt.
What Markets Are Focusing On Next
The quarter’s headline figures combine mark-to-market volatility with active balance-sheet positioning.
- Q4 unrealized loss: $17.44 billion
- Deferred tax benefit in Q4: $5.01 billion
- Bitcoin holdings (as of Jan. 4, 2026): 673,783 BTC (~$62 billion)
- USD reserve funded: $2.25 billion
Institutional reaction has been swift, with Strategy’s stock down about 48% in 2025 and nearly 70% below its November 2024 peak. The drawdown has intensified scrutiny of whether the company’s enterprise value can sustain a Bitcoin-first treasury model.
JPMorgan warned that potential exclusion from MSCI indices could drive up to $2.8 billion in passive outflows, framing that as a material liquidity risk. The warning lands as market capitalization and enterprise-value metrics are described as converging with the value of the company’s Bitcoin holdings.
Analysts compiling Strategy data captured the pressure point directly: “The enterprise value of the company is on the verge of dropping below that of its Bitcoin stockpile.” That line reflects investor concern that the corporate-treasury approach becomes harder to defend when equity reprices faster than the underlying asset.
For investors, product teams, and compliance officers, the setup highlights two practical trade-offs: earnings volatility increases under ASU 2023-08, and outsized Bitcoin exposure elevates index- and liquidity-related risks. With Strategy holding fresh cash reserves while continuing to expand its Bitcoin position, attention will stay on balance-sheet flexibility, preferred servicing, and index eligibility through the first half of 2026.