Strategy, led by Michael Saylor reported a massive unrealized loss tied to the decline in the value of its Bitcoin holdings, highlighting the volatility impact of mark-to-market accounting.
Strategy Inc., the U.S. company known for its aggressive Bitcoin accumulation strategy, disclosed an unrealized loss of about $17.44 billion for the fourth quarter of 2025. The loss stems from a significant drop in the market value of its roughly $63 billion Bitcoin portfolio, which must now be reported at fair market value under current accounting standards.
The firm’s accounting approach, which requires marking its cryptocurrency holdings to market at the end of each quarter, means that price swings in Bitcoin are reflected directly in earnings. Because Bitcoin’s price fell by around 24 % in the fourth quarter, Strategy’s reported results swung sharply from earlier periods, producing a large paper loss.
Market valuation swing hits quarterly results
While the nearly $17.44 billion unrealized loss does not represent cash outflows, it significantly drags on Strategy’s quarterly financial statements and highlights the risks of maintaining concentrated positions in highly volatile digital assets.
The company also reported a $5 billion deferred tax benefit for the quarter, which may help cushion future tax liabilities tied to the loss.
This result stands in contrast to past quarters when Strategy posted profits, underscoring how dramatically earnings can fluctuate under fair-value accounting in response to cryptocurrency price movements.
