Michael Saylor’s Strategy posted a $12.4 billion net loss in the fourth quarter, largely driven by mark-to-market declines in its enormous Bitcoin holdings.
The loss came as Bitcoin briefly dipped below $60,000, dragging Strategy’s stash below its average purchase price for the first time since 2023. In the process, it erased much of the paper gains the company had built up during last year’s post-election rally in U.S. markets.
For years, Strategy reinvented itself from a sleepy enterprise software firm into a high-octane Bitcoin proxy, repeatedly tapping equity and debt markets to buy more BTC whenever its stock traded at a premium. That playbook is now under pressure.
Alongside earnings, the company announced no new share sales or debt issuance, a notable shift that suggests access to fresh capital may be tightening as investor enthusiasm cools.
Saylor has pushed back on fears of forced selling, saying there are no margin calls and that Strategy holds $2.25 billion in cash, enough to cover interest payments for more than two years. Still, the strain is mounting. Bitcoin continues to trade well below Strategy’s reported average cost of $76,052, and the company reiterated that it does not expect to post profits anytime soon.
A Massive Bitcoin Bet Under Strain
Strategy now holds over 713,500 Bitcoin, worth roughly $46 billion, according to Bloomberg. While the firm added another $75.3 million worth of BTC in late January, analysts say the broader model is starting to creak.
Benchmark analyst Mark Palmer told Bloomberg that investors are increasingly focused on a simple question: can Strategy still raise capital to keep buying Bitcoin in a weaker market?
Skeptics are growing louder. Michael Burry, the Scion Asset Management founder best known for calling the 2008 housing crash, recently warned that further declines in Bitcoin could trigger cascading losses for corporate holders. His comments revive long-standing concerns from short sellers about Strategy’s reliance on leverage and exposure to a non-yielding asset.
Those worries are already reflected in the stock. Strategy shares are down nearly 80% from their November 2024 peak, highlighting just how fast sentiment has turned.
BitMine Feels the Pain as Ethereum Slides
Strategy isn’t alone. BitMine Immersion Technologies is sitting on roughly $8.2 billion in unrealized losses after Ethereum fell to around $1,930, well below the company’s average purchase price of $3,826.
BitMine holds about 4.29 million ETH, acquired for roughly $16.4 billion, and has seen the value of those holdings shrink following a nearly 30% drop since early January.
Still, the company says it’s in a stronger position than the market might assume. BitMine has staked more than 2.9 million ETH, generating roughly $188 million in annual yield, holds $538 million in cash, and carries no debt. Management has framed the sell-off as a buying opportunity — even as BitMine’s shares have collapsed 88% from their July peak, mirroring the brutal drawdown seen at Strategy.
For now, both firms stand as reminders of how quickly leverage and volatility can turn conviction trades into stress tests when crypto markets slide.
