Why Strategy Reported a $12.5B Bitcoin Loss
Strategy reported a net loss of $12.54 billion for the first quarter of 2026, driven primarily by an unrealized Bitcoin loss of $14.46 billion.
Summary:
- Strategy net loss: $12.54 billion in Q1.
- $14.46 billion unrealized Bitcoin loss.
- Bitcoin now above $81,000.
- Strategy average purchase price: $75,537.
- 818,334 BTC in the corporate reserve.
- 89,600 BTC purchased during Q1.
- $11.68 billion in capital raised in 2026.
Strategy reported the largest quarterly loss in its history: $12.54 billion, or -$38.25 per share, significantly below Wall Street expectations of -$18.98. Operating loss reached $14.47 billion compared to $5.92 billion a year earlier.
The reason is specific and comes almost entirely from Bitcoin, similar to the situation with another crypto company that reported a $3.8 billion loss.
Strategy reported more than $14 billion in unrealized accounting losses on its BTC reserves after Bitcoin fell by around 22% during the first quarter – from nearly $97,000 in January to around $63,000 in February. This does not mean the company sold Bitcoin at a loss, but rather that it was forced to report the lower market value of its reserves at the end of the quarter.
The market today, however, looks different. Bitcoin is now trading above $81,000, which is above Strategy’s average BTC purchase price of $75,537. This means the company’s entire position is back in profit, at least on paper.
The technical picture also shows a clear recovery. Bitcoin built a gradual upward move through March and April and is now trading above all three major moving averages:
- 50-MA at $78,241
- 100-MA at $77,727
- 200-MA at $74,810
RSI stands at 66.61 – close to overbought levels, but still without a clear signal of market overheating.
Aggressive buying during the decline
The most interesting part is that Strategy did not reduce purchases during the correction. On the contrary, the company added another 89,600 BTC during the first quarter for approximately $5.5 billion, recording the second-largest quarterly accumulation in its history.
READ MORE: Crypto Funds: Weekly Inflows Mask Volatile Market Dynamics
This creates a paradox in the financial statements. While accounting standards show a record loss, the company itself views the period as successful because it increased the amount of Bitcoin per share. This is precisely the main metric Strategy uses – the so-called BTC Yield, which measures the growth of BTC reserves relative to diluted shares outstanding.
As of early May, this metric had reached 9.4% year-to-date.
Against this backdrop, the core software business remains relatively small. Revenue from it was $124.3 million, up 11.9% year-over-year, with a gross margin of 67.1%, but its scale is limited compared to the size of the Bitcoin reserves.
The biggest risk is no longer Bitcoin’s decline
The most important part of the report is not the loss itself, but the signal in the filing that the company may begin selling Bitcoin to finance its dividend obligations.
This is a critical moment for Strategy because the company’s entire identity until now has been built around the idea of “buy Bitcoin, never sell.” This approach is exactly what turned the company into a preferred vehicle for investors seeking indirect BTC exposure through the stock market.
The problem comes from the scale of the new obligations. The “STRC preferred stock” program has already reached a market capitalization of $8.5 billion in just nine months, and the company has raised $5.58 billion through it since the beginning of the year. Total capital raised reached $11.68 billion as of May 3 – the largest equity issuance in the United States for 2026.
Against this, however, stand approximately $1.5 billion in annual dividends. With $2.21 billion in cash available at the end of March, this means that without new financing or BTC sales, the company has roughly a year and a half of buffer.
This is where the first real crack appears in the “never sell” strategy.
What changes with Bitcoin above $81,000
Bitcoin’s recovery above $81,000 changes almost every number in the report.
At current prices, the 818,334 BTC now represent an unrealized profit of $4.9 billion relative to the average purchase price. The first-quarter loss has effectively turned into an accounting profit within just a few weeks.
This also changes the discussion around potential sales. At the current value of the BTC reserves – approximately $66.7 billion – the $1.5 billion annual dividend represents roughly 2.25% of the total position. Selling BTC at these levels looks very different from what it would have looked like at prices around $63,000.
The market, however, will watch not simply whether the company sells, but under what conditions it does so.
If Strategy continues buying BTC at the pace seen in the first quarter while Bitcoin remains above the average purchase price, this will reinforce the argument that the loss was only a temporary accounting effect.
The opposite scenario would be far more problematic: selling BTC below the average purchase price in order to cover dividends.
That would mean the dividend structure is beginning to force the company into actions that contradict its core strategy.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
