TLDR:
- MicroStrategy reported a $5.91 billion unrealized Bitcoin loss for Q1 2025
- The company holds 528,185 Bitcoin purchased at an average price of $67,458 per coin
- MicroStrategy paused Bitcoin purchases in April as prices fell below $87,000
- A $1.69 billion tax benefit will partially offset the quarterly loss
- Despite recent losses, the company still has an unrealized profit of 14.62% (around $5 billion)
MicroStrategy, now known as Strategy, has announced that it expects to report a substantial loss for the first quarter of 2025 after recording $5.91 billion in unrealized Bitcoin losses. The Virginia-based software firm revealed this information in a recent SEC filing.
The company currently holds 528,185 Bitcoin, which it acquired at an average price of $67,458 per coin. This massive crypto holding is now valued at approximately $41.3 billion. Strategy mentioned that a $1.69 billion tax benefit will partially offset the hit to its quarterly results.
Bitcoin’s price has recently dropped to around $77,351, marking a five-month low. This decline follows renewed market unease over former President Donald Trump’s proposed tariffs, which have weighed heavily on risk assets.
Market Impact
The broader crypto selloff has affected tech stocks as well. The Nasdaq is down roughly 10% month-to-date, while the S&P 500 has shed over 7%.
Despite the current downturn, Strategy was aggressive with its Bitcoin purchases earlier this year. The company spent $7.7 billion in Q1 on Bitcoin at an average price of $95,000 per coin.
However, Strategy has now paused additional purchases in April following the sharp drop in Bitcoin prices. According to an SEC filing on April 7, the company made no Bitcoin purchases during the week of March 31 to April 6.
This pause came during a period of heightened market volatility. Bitcoin surged to as high as $87,000 on April 2 after starting the week around $82,000, only to fall below $80,000 on April 6.
Strategy’s stock has taken a hit due to the Bitcoin slump. Shares fell 10.6% to $262 on Monday as investors reacted to the news of the unrealized losses.
Financial Position
According to cryptocurrency analytics firm Akrham, Strategy is only 13% away from losing virtually all of its Bitcoin gains. At the current price, the company is still sitting on an unrealized profit of 14.62% (roughly $5 billion).
The company’s co-founder and former CEO, Michael Saylor, has repeatedly ruled out selling even a small portion of the Bitcoin holdings. Saylor continues to promote Bitcoin on social media, recently writing, “Bitcoin is most volatile because it is most useful.”
Strategy also noted that its software segment continues to operate without positive cash flow. This has forced the company to rely on debt and equity offerings to fund its operations and Bitcoin purchases.
During the recent market volatility, the company did not sell any shares of class A common stock, which it typically uses for financing its Bitcoin buys.
In the same SEC filing, Strategy acknowledged that future profitability remains uncertain due to volatility in digital asset values. The company’s business model has become increasingly tied to the performance of Bitcoin.
The recent price decline has put Strategy in a precarious position. If Bitcoin prices continue to fall below the company’s average purchase price of $67,458, it could face even larger unrealized losses in future quarters.
For now, investors are watching closely to see if Strategy will resume its Bitcoin purchases at these lower prices or continue its current pause in acquisition activity.
The company’s total Bitcoin holdings of 528,185 BTC make it the largest publicly listed corporate holder of the cryptocurrency in the world.
