Strategy has reported an operating loss of $8.33bn for the second quarter, as a sharp slide in the price of Bitcoin erased much of the value of the company’s vast digital asset holdings and reversed a huge paper profit recorded a year earlier.
The results were driven by an $8.32bn unrealised loss on its Bitcoin position, reflecting the cryptocurrency’s 27% decline so far this year. Bitcoin was trading near $64,700 after the earnings release, down from about $88,400 at the end of 2025, leaving Strategy’s holdings worth less than their total acquisition cost.
The company’s net loss for the quarter came in at $8.22bn, equivalent to $24.45 per diluted common share. That compares with net income of $10.02bn, or $32.60 per share, in the same period 12 months earlier, when rising crypto prices had translated into a $14.05bn unrealised gain on digital assets.
Despite the swing into heavy loss, Strategy’s shares were little moved in after-hours trading, suggesting investors had largely anticipated the impact of weaker Bitcoin prices on the company’s bottom line.
Bitcoin position now below cost
As of 26 July, Strategy held 843,775 BTC, a 25% increase in its Bitcoin stash since the start of the year. The company put the original cost of that position, including fees and expenses, at $63.69bn, against a market value of $54.77bn at the time of the report.
That implies an average purchase price of roughly $75,476 per Bitcoin. With BTC trading around $64,700 after the earnings announcement, Strategy’s position was about $10,776 “underwater” per coin relative to its average acquisition cost.
Overall, the Bitcoin portfolio sat approximately $8.92bn below its original cost base. However, the loss reported for the quarter was predominantly unrealised, reflecting mark-to-market movements in the cryptocurrency rather than the result of selling the entire holding.
Earlier coverage from crypto.news noted that Strategy made no Bitcoin purchases between 20 and 26 July, with its total holdings unchanged at 843,775 BTC during that period.
Selective Bitcoin sales and funding strategy
Although it has largely retained its position, Strategy has sold around $218.4m worth of Bitcoin this year to help pay preferred stock dividends. Those disposals are small in relation to its overall digital asset reserve, but indicate the company is willing to use a portion of its crypto holdings to support its financing commitments.
Alongside its digital asset activity, Strategy’s core software business continued to grow. Quarterly revenue from that division reached $122.4m, up 6.9% on the $114.5m recorded a year earlier. Gross profit stood at $81.6m, representing a margin of 66.6%.
The company said it had raised $17.06bn through capital markets programmes over the year and reported a Bitcoin yield of 4.5%. That internal measure tracks the change in Bitcoin held per assumed diluted share and is not comparable to a traditional investment yield.
Balance sheet moves and buyback options
Strategy has also moved to reshape its balance sheet as Bitcoin’s fall has increased pressure on its finances. The company reduced its convertible debt by 18% to $6.71bn after buying back $1.5bn of notes at a discount, trimming part of its future repayment obligations.
Its US dollar reserve rose by $525m to $3.75bn. According to Strategy, that cash buffer would cover 2.1 years of preferred stock dividends under its current policy, although the firm cautioned that the figure does not guarantee payments under all market conditions.
In addition, Strategy has set up separate $1bn repurchase programmes for its common shares and for its digital credit securities. These authorisations give the company the flexibility to buy back securities but do not oblige it to deploy the full amounts.
Exposure to Bitcoin volatility
Strategy remains one of the largest publicly traded corporate holders of Bitcoin, offering US investors indirect exposure to the cryptocurrency through its securities. Its share price can move not only with Bitcoin’s market value, but also in response to debt costs, equity issuance, preferred dividends and changes to its capital structure.
The second-quarter figures underline how swings in Bitcoin’s price can translate into large fluctuations in reported earnings. In the space of a year, Strategy has shifted from a $14.05bn unrealised gain on digital assets to an $8.32bn unrealised loss.
While the company’s increased cash reserves and lower convertible debt provide extra financial flexibility, Bitcoin is still trading below Strategy’s average purchase level of $75,476 per coin. Any further decline would deepen paper losses on its holdings, while a sustained recovery above that threshold would be needed to lift the portfolio back above its total acquisition cost.
