Class-Action Suits Hit Strategy After $5.9B Bitcoin Loss

Published: 2025-07-19 05:29:57 |

At least seven law firms, including Pomerantz LLP and Robbins Geller, have filed class-action lawsuits against Strategy (formerly MicroStrategy), alleging securities fraud in its Bitcoin investment strategy. The suits claim the company overstated potential profits and downplayed risks after reporting a $5.9 billion unrealized Bitcoin loss in an April 7, 2025 8-K, which triggered an 8.7% share price drop. Crypto attorney Tyler Yagman warns these cases could take years to resolve and often stall. Despite legal scrutiny, Strategy added $472 million of Bitcoin on July 15, boosting its crypto treasury to over 601,550 BTC. Traders are now eyeing Strategy’s Q2 earnings report on July 31, with an expected EPS of –$0.10, to gauge how the ongoing Bitcoin loss and risk disclosures will affect financial results. CEO Michael Saylor’s commitment to using BTC as the company’s primary reserve asset remains unchanged. The handling of this Bitcoin loss and related legal challenges could influence corporate crypto strategies and investor confidence.

Neutral

While the class-action lawsuits raise concerns about transparency and could introduce short-term volatility in Bitcoin trading, Strategy’s continued $472 million BTC purchase underscores sustained corporate demand. This balance of legal headwinds and fresh buying interest may offset each other, resulting in a neutral impact on Bitcoin’s price. In the long term, the outcome of these securities fraud claims and Strategy’s treasury management approach will shape market confidence and corporate adoption trends, making the overall price effect uncertain.