Strategy posts $7.5B paper loss as Bitcoin slides toward $65K ahead of Q4 results
Strategy, the largest corporate holder of Bitcoin, faces an estimated $7.5 billion unrealized loss as BTC falls toward $65,000. The firm holds about 713,000 BTC bought at an average cost of $76,000; with spot around $65,500, the drawdown is roughly 14%. A recent SEC filing also showed a purchase of 855 BTC. Strategy shares plunged about 14% to near $110 — levels not seen since August 2024 — as investors brace for the company’s Q4 2025 earnings report due after market close. Analysts expect EPS of -$0.08 on $118.81M revenue, down sharply from prior quarter’s $8.42 EPS and $128.69M revenue, underscoring Strategy’s tight correlation with Bitcoin price moves. The company funds Bitcoin accumulation primarily by issuing equity; despite the decline it still trades at a modest premium to net asset value (mNAV ~1.09), suggesting it can raise capital without immediate dilution. However, scrutiny grows over the viability of an equity-funded BTC accumulation strategy during drawdowns. Market participants are focused on comments from Michael Saylor on the upcoming earnings call for guidance on strategy and capital plans.
Bearish
The news is bearish for several reasons: 1) Large unrealized losses by Strategy (≈$7.5B) highlight downside pressure on Bitcoin and can prompt share selling by leveraged or risk-averse investors, increasing selling pressure on BTC-linked assets. 2) Strategy’s capital model — issuing equity to buy Bitcoin — becomes riskier during drawdowns; if equity issuance slows or investors demand bigger discounts, Strategy’s buying support for BTC could weaken. 3) A 14% one-day drop in Strategy shares and disappointing EPS forecasts signal heightened correlation between the company and BTC price swings, raising short-term volatility as traders price in potential further markdowns. 4) Market focus on Michael Saylor’s remarks can amplify moves: any cautious guidance or pause in purchases would likely be interpreted negatively, while reassurance or continued purchases could provide temporary support. Historical parallels: past episodes where large corporate treasury holders cut or halted purchases (or where whale selling occurred) have correlated with short-to-medium-term BTC weakness. Short-term impact: elevated volatility, potential further downside for BTC and Strategy shares, and trading opportunities around the earnings call. Long-term impact: if Strategy maintains purchases and capital access, the structural demand may persist — but repeated drawdowns could force changes to the equity-funded model, weakening a significant institutional demand channel and exerting longer-term bearish pressure.