Strategy Inc. shares fell 5% Monday after announcing an unrealized $5.9 billion Q1 loss following adoption of new accounting standards requiring Bitcoin to be valued at market prices.
The company, formerly MicroStrategy, previously classified its Bitcoin as intangible assets, which only allowed recognition of losses but not gains unless tokens were sold. The accounting change comes as Bitcoin erases nearly all gains since Trump's November election.
About $1 billion of the losses stem from recent purchases, with Strategy spending $7.79 billion on Bitcoin in 2025 alone. Despite the loss, the accounting change will boost retained earnings by nearly $13 billion.
Strategy's stock price closely mirrors Bitcoin's movements, functioning as a leveraged proxy for the cryptocurrency. With approximately $41.8 billion in Bitcoin holdings entering 2025, the company's market value is heavily influenced by crypto price swings, amplifying both gains and losses compared to direct Bitcoin investments. This correlation has made Strategy a popular vehicle for investors seeking Bitcoin exposure through traditional markets.
The company warned it may not regain profitability in future periods and that declining Bitcoin values could affect its ability to meet financial obligations. Strategy reported $8.22 billion in outstanding debt as of March 31.
Since becoming the first public company to adopt Bitcoin as a capital allocation strategy in 2020, Strategy shares have risen over 2,200%.
Strategy (D1)
The stock price is currently trading below 23.6% Fibonacci retracement level. RSI is in short term bearish divergence with lower high, while MACD trends lower after bearish crossover. Source: xStation
MicroStrategy in trouble? Shares down 67% from the highs ✂
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