Strategy (MSTR), the world’s largest Bitcoin ($BTC-USD) treasury company, reported a $14.46 billion unrealized loss on its holdings for the first quarter of 2026, according to its latest 8-K filing with the U.S. SEC.
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The loss followed a sharp decline in the Bitcoin price, which fell more than 20% during the quarter, marking its weakest Q1 performance since 2018. This drop reduced Strategy’s Bitcoin holdings to a carrying value of $51.65 billion at the time, below its $58.02 billion total acquisition cost.
What’s Behind Strategy’s Q1 Bitcoin Loss
Strategy’s $14.46 billion unrealized loss reflects a decline in the current market value of its Bitcoin holdings relative to the average price at which the company bought them. While it’s not an actual cash loss, it’s a significant paper loss that still affects the company’s valuation outlook. However, the decline can be reversed if Bitcoin rises back above the purchase price of the company‘s holdings.
Notably, Strategy maintains an aggressive long-term “never-sell” strategy under Michael Saylor, the founder and Executive Chairman. Despite its paper losses piling up as Bitcoin declines, the company continues to accumulate more coins, with its latest purchase adding 4,871 BTC to its already massive holdings.
In addition to its recently reported unrealized loss, Strategy has also recorded a $2.42 billion deferred tax benefit. However, the company has set aside a $1.73 billion reserve against it to reduce how much of that benefit is counted on the firm’s balance sheet. Moreover, Strategy expects to record another $0.5 billion valuation allowance on deferred tax assets tied to its software business.
Strategy Buys More Bitcoin Even After Bruising Q1
During Q1, Strategy added about 88,316 BTC worth $7.25 billion, even as Bitcoin prices declined. Despite the Q1 losses, the company resumed purchases in the first week of April, acquiring 4,871 BTC for roughly $329.9 million, bringing total holdings to 766,970 BTC, as of April 5.
The April purchases were made above the company’s average cost basis, meaning the position remains underwater. Strategy funded the buys through sales of STRC preferred stock and MSTR common shares, as part of its broader 42/42 plan, which targets $84 billion in capital raises by 2027.
Bitcoin now makes up more than 90% of Strategy’s assets, increasing exposure to price swings and amplifying balance sheet risk. Reflecting that exposure, Strategy’s stock fell more than 25% in Q1, alongside Bitcoin and the broader crypto market. However, as of today, MSTR has reversed some of those losses. The stock is also up 5% today, currently trading at roughly $129.
Is MSTR Stock a Strong Buy?
Based on 12 analyst ratings on TipRanks over the past three months, MSTR carries a “Strong Buy” consensus with 12 Buy and no Hold or Sell recommendations. The stock price targets range from $175 to $540. For investors seeking exposure to crypto-related shares, TipRanks Stocks Comparison Center points to alternatives such as Riot Platforms (RIOT) and Block (XYZ), both rated Strong Buy.
