Strategy Stock (MSTR) Skyrockets 5% Despite Facing a $17 Billion Loss as BTC Volatility Hits Bottom Line

Michael Saylor‘s Strategy stock (MSTR) is facing its toughest test yet. On January 5, 2026, Strategy Inc. (formerly MicroStrategy) revealed a staggering $17.44 billion unrealized loss for the fourth quarter. This massive hit to the books comes because the company now uses “fair value” accounting, meaning they have to report exactly how much their Bitcoin is worth at the end of every quarter, even if they haven’t sold a single coin.

While Saylor remains the world’s most famous Bitcoin bull, the market is starting to question if the company’s model of using debt to buy crypto is sustainable during a downturn. Here are the five key things you need to know.

New Accounting Rules Create Paper Rollercoaster

Thanks to accounting changes adopted last year, Strategy’s earnings reports now look like a heart rate monitor. Because the company must “mark to market” its $63 billion Bitcoin stash, small price drops in crypto turn into multibillion-dollar losses on paper. In Q4, Bitcoin’s value dipped roughly 24%, triggering this latest $17.44 billion loss. However, it’s important to remember these are “unrealized,” meaning the company only loses the actual cash if it decides to sell.

MSTR Shares Tumble as the Premium Fades

For years, investors were willing to pay a massive premium to own Strategy shares rather than just buying Bitcoin directly. But that trust is wavering. Strategy’s stock fell 48% in 2025, and its mNAV, a metric that compares the company’s value to its actual Bitcoin holdings, has dropped to just above 1. This means the extra value investors used to give Saylor for his Bitcoin stacking skills has almost entirely disappeared.

Strategy Builds a $2.25 Billion Safety Net

Critics have long worried that Strategy would be forced to sell its Bitcoin just to pay the bills, especially since its software business doesn’t make much extra cash. To quiet those fears, the company established a $2.25 billion cash reserve by selling common shares. This rainy day fund is designed to cover interest payments and dividends for the next couple of years, so Saylor won’t be forced to sell his digital gold at a low price.

It Was a ‘Small’ New Year Purchase

Even with the massive quarterly loss, Saylor isn’t stopping. During the first week of January 2026, the company bought another 1,286 Bitcoin for about $116 million. Strategy now owns a total of 673,783 tokens. While this purchase is small compared to their total stash, it sends a clear message to the market: Saylor is still “buying the dip” regardless of what the accounting looks like.

The $5 Billion Deferred Tax Benefit Provides a Silver Lining

It wasn’t all bad news in the filing. Strategy reported a $5 billion deferred tax benefit this quarter. In simple terms, because the company recorded such a huge loss on its Bitcoin, it may be able to use that loss to cancel out future tax bills. This provides a bit of a financial cushion as the company navigates the current crypto winter.

Can the Model Survive in 2026?

The takeaway is that Michael Saylor has officially built a crypto reactor that is now feeling the heat. By creating a cash reserve, he has bought himself time to wait for a Bitcoin recovery. However, with the stock’s premium disappearing and multibillion-dollar losses hitting the headlines, the pressure is on. The focus is now on whether Bitcoin can reclaim its highs before Strategy’s new $2.25 billion safety net starts to run dry.

Is Strategy Good Stock to Buy?

Turning to TipRanks, analyst data shows Wall Street remains firmly optimistic about Strategy (MSTR). In total, 14 analysts have weighed in over the past three months, and the consensus rating sits at Strong Buy. Out of these calls, 12 analysts call the stock a Buy, two say a Hold, and none recommend a Sell.

The average 12-month MSTR price target comes in at $467.75, which implies roughly 180.5% upside from the recent close.

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