Crypto Strategy Faces Multibillion-Dollar Q4 Loss as Bitcoin Plunges 24%

Another quarter, another brutal lesson in crypto volatility.

The Price of Exposure

A major investment strategy is staring down a staggering multibillion-dollar loss for the final quarter of 2025. The culprit? A nearly one-quarter nosedive in Bitcoin's price during the period. It's the classic high-risk, high-reward play—except when the reward decides to take an extended vacation.

When the Tide Goes Out

This isn't just about a single asset's bad run. It's a stress test for any strategy overly reliant on crypto's famously fickle momentum. The report highlights the raw, unhedged exposure some funds still carry—betting big on digital gold without a parachute for when the elevator drops. You'd think after a few cycles, the 'diversification' memo would have landed.

The New Normal or a Warning Shot?

For the true believers, this is just another dip to buy. For everyone else, it's a multi-billion-dollar reminder that in crypto, the line between 'strategic allocation' and 'gambling with better marketing' can vanish faster than a meme coin's liquidity. The finance world watches, adjusts its spreadsheets, and quietly thanks whatever higher power it believes in for boring old treasury bonds. Sometimes, the most sophisticated strategy is just not losing your shirt.

Strategy’s accounting change exposes the full effect of Bitcoin’s drop

Cryptopolitan previously reported that Strategy changed how it logged its crypto holdings in Q1 2024 when the company began valuing its Bitcoin at current market prices, rather than keeping it at cost.

That naturally makes earnings far more sensitive to price moves, especially during sharp selloffs like the one seen in the fourth quarter.

Bitcoin fell 24% over that period. That single move explains why the coming loss looks so heavy. Aaron Jacob, an associate professor at Brigham Young University and a senior adviser at Taxbit, put it plainly. “There was this one-time pop, but that is a different story in this quarter,” Jacob said. “It is going to be a sizable loss.”

The timing matters. Strategy, once known as MicroStrategy, reinvented itself years ago as a Leveraged Bitcoin proxy. That approach paid off for a while. The stock beat major indexes after the shift. But sentiment turned in 2025. The shares fell 48% during the year, signaling growing doubts about the treasury‑heavy model Saylor built more than five years ago.

Falling equity prices also raised practical concerns. Bitcoin produces no income. The company’s software unit brings in limited positive cash flow. Investors began to question how Strategy WOULD cover future costs like dividends and interest payments without selling Bitcoin. To ease that pressure, the company raised cash on Dec. 1 by selling common shares and building a reserve.

Strategy juggles guidance, balance sheet pressure, and fading premium

At the start of last month, Strategy updated its full‑year outlook using a Bitcoin price range of $85,000 to $110,000 by year‑end. Based on that range, the company projected operating income anywhere from a $7 billion loss to a $9.5 billion profit. Bitcoin finished the year down 6.5%, closing at $87,648, pushing expectations closer to the lower end of that range.

Saylor’s crypto movement is no longer unique, as you should know, because in 2024, many public companies copied the Strategy playbook to attract investors seeking stock‑based crypto exposure.

Some surged early, then sank as prices rolled over. Tommy Lee‑backed BitMine Immersion Technologies followed that path and now faces the same fair‑value accounting rules.

Bitcoin’s crash also hit Saylor personally, as his net worth fell about 40% in 2025 to roughly $3.8 billion, according to the Bloomberg Billionaires Index.

Another pressure point is Strategy’s enterprise value, which includes debt and perpetual preferred stock, stood at $61 billion, which is close to the value of its Bitcoin holdings and risks slipping below it for the first time in more than two years.

The stock has dropped by nearly 70% from its November 2024 peak, dragging the company’s mNAV to just above 1 and wiping out most of the premium investors once paid for Strategy exposure.

But on the first trading day of 2026, Strategy stock has surged by 5.2% as of press time to around $160, while Bitcoin has rallied 2.6% to $90,549.

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