Strategy, a prominent Bitcoin holding company, has reported a staggering $12.4 billion net loss for the fourth quarter of 2025, triggered by a significant downturn in Bitcoin's price. The company's shares responded sharply, plummeting 17% on Thursday as the news broke.

The primary culprit behind Strategy's substantial loss is the 22% fall in Bitcoin's value during the quarter. After reaching a high of $126,000 in early October, the cryptocurrency tumbled to below $88,500 by the end of December. This decline has continued into the new year, with Bitcoin currently trading around $64,500, a 30% decrease year-to-date. This price is also below Strategy's average cost per Bitcoin of $76,052.

Despite the massive loss, Strategy reported a 1.9% year-over-year increase in Q4 revenues, reaching $123 million. This growth was partially driven by the company's business intelligence arm. However, the positive revenue news was overshadowed by the impact of the Bitcoin sell-off on the company's holdings.

Strategy holds a substantial 713,502 Bitcoins. The recent tumble in Bitcoin's price has left Strategy down 17.5% on these holdings.

Despite the significant quarterly loss, Strategy's Chief Financial Officer, Andrew Kang, maintains that the company's capital structure remains strong. He stated that Strategy has built a "digital fortress" anchored by its Bitcoin holdings and its shift to Digital Credit. He also highlighted the company's increased cash holdings, which reached $2.25 billion in Q4, providing a buffer for dividend payouts for up to 30 months. Furthermore, Strategy has no major debt maturing until 2027, reducing immediate pressure to liquidate Bitcoin to meet obligations.

Echoing this sentiment, Strategy CEO Phong Le assured investors that there is no reason to panic about the company's financial position or its Bitcoin strategy. He emphasized that Strategy's enterprise value remains above its $45 billion Bitcoin reserve and that its convertible debt represents a relatively small portion of its overall value. Executive Chairman Michael Saylor advised investors to "hold on" and remember the fundamentals that led them to buy Bitcoin.

The company established a $1.44 billion USD reserve in December, funded through equity issuance, to support dividend and interest payments. As of January 4, 2026, the balance of the USD Reserve was $2.25 billion.

The significant unrealized loss underscores the impact of cryptocurrency price swings on Strategy's financial performance. As one of the largest corporate Bitcoin holders, the company's balance sheet and earnings are closely tied to Bitcoin price movements, impacting investor sentiment.