A sharp drop in Bitcoin prices has erased billions from Strategy Inc.’s balance sheet, pushing the company to report a $12.54 billion net loss in the first quarter of 2026. The result ranks among the largest quarterly losses tied to cryptocurrency exposure by a publicly traded firm.
The company’s financial hit came almost entirely from unrealized losses on its Bitcoin reserves. Its operating loss reached $14.47 billion, more than double the $5.92 billion recorded during the same period last year. Of that figure, $14.46 billion reflects the decline in the market value of its digital assets.
Strategy has built its identity around Bitcoin. That strategy now exposes the company to extreme price swings in the crypto market. The latest results highlight how tightly its financial health tracks the performance of a single, highly volatile asset.
The company’s Bitcoin holdings continue to grow despite the downturn. As of May 3, Strategy owned 818,334 BTC, marking a 22% increase since the start of the year. The stash is valued at about $66.8 billion, compared to a purchase cost of $61.81 billion. The average acquisition price stands near $75,537 per coin, while Bitcoin recently traded around $81,600 after recovering from a prolonged slump.
Leadership remains optimistic. Strategy has raised $11.68 billion so far this year to fund further Bitcoin purchases. Its preferred equity product, STRC, generated $5.58 billion—up 189% from the previous year.
“Adoption of Bitcoin continues to grow in 2026,” said Strategy President and CEO Phong Le, in a statement. “Digital credit, highlighted by STRC, has been a big success. STRC has shown strong demand, high liquidity, and low volatility. We raised $5.6 billion year-to-date of STRC gross proceeds, increased daily trading volume to $375 million, while bringing volatility down to 3%, all done during a Bitcoin bear market.”
Investors appear divided. Strategy’s stock, MSTR, dipped slightly after hours but has surged in recent weeks alongside Bitcoin’s rebound. Shares closed at $186.90, up 1.7% on the day and nearly 56% over the past month. Despite the rally, the stock remains down more than 51% over the past year, far below its peak above $400 last summer.
The company has also maintained steady payouts to investors. It reported 23 consecutive on-time dividend distributions on its preferred equity products, totaling over $693 million since early 2025.
Outside of crypto, Strategy’s core software business delivered modest gains. Quarterly revenue reached $124.3 million, up 11.9% year over year, with a gross margin of 67.1%. The segment remains stable but small compared to the company’s Bitcoin exposure.
Strategy is now seeking shareholder approval to increase dividend payments on STRC to a semi-monthly schedule. The company argues that more frequent payouts could boost liquidity and stabilize pricing for the instrument.
The broader question remains unresolved. Strategy’s aggressive Bitcoin strategy offers high upside during rallies but leaves little protection when the market turns. This quarter’s results show just how costly that bet can become.
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