MicroStrategy, now known as Strategy, has announced that it expects to report a substantial loss for the first quarter of 2025

MicroStrategy, now known as Strategy, has announced that it expects to report a substantial loss for the first quarter of 2025 after recording $5.91 billion in unrealized Bitcoin losses.

MicroStrategy (NASDAQ:MSTR) is expected to report a massive first-quarter loss as the company booked $5.91 billion in unrealized Bitcoin losses, according to a recent SEC filing.

The Virginia-based software firm will take a hit to its quarterly results despite a $1.69 billion tax benefit.

The company currently holds 528,185 Bitcoin, which it bought at an average price of $67,458 per coin. These coins are now valued at approximately $41.3 billion at the current Bitcoin price of about $77,351.

Bitcoin’s price has dropped to a five-month low amid renewed market unease over former President Donald Trump’s proposed tariffs, which are weighing heavily on risk assets.

This selloff has also affected tech stocks, with the Nasdaq down about 10% month-to-date and the S&P 500 losing over 7%.

Earlier this year, MicroStrategy was aggressively buying Bitcoin. In Q1 alone, the company spent $7.7 billion on Bitcoin at an average price of $95,000 per coin.

However, MicroStrategy has now paused its additional purchases in April following the sharp drop in Bitcoin prices.

According to an SEC filing on April 7, the company did not make any Bitcoin purchases during the week of March 31 to April 6.

This pause came during a period of market volatility, with Bitcoin surging to as high as $87,000 on April 2 after starting the week around $82,000, only to fall below $80,000 on April 6.

Shares of MicroStrategy slid 10.6% to $262 on Monday as investors reacted to the news of the unrealized losses.

According to cryptocurrency analytics firm Akrham, MicroStrategy is only 13% away from losing virtually all of its Bitcoin gains. At the current price, the company is still sitting on an unrealized profit of 14.62% (roughly $5 billion).

The company’s co-founder and former CEO, Michael Saylor, has repeatedly ruled out selling even a small portion of the Bitcoin holdings. Saylor continues to promote Bitcoin on social media, recently writing, “Bitcoin is most volatile because it is most useful.”

MicroStrategy also noted that its software segment continues to operate without positive cash flow. This has forced the company to rely on debt and equity offerings to fund its operations and Bitcoin purchases.

During the recent market volatility, the company did not sell any shares of class A common stock, which it typically uses for financing its Bitcoin buys.

In the same SEC filing, MicroStrategy acknowledged that future profitability remains uncertain due to volatility in digital asset values. The company’s business model has become increasingly tied to the performance of Bitcoin.

The recent price decline has put MicroStrategy in a precarious position. If Bitcoin prices continue to fall below the company’s average purchase price of $67,458, it could face even larger unrealized losses in future quarters.

For now, investors are watching closely to see if MicroStrategy will resume its Bitcoin purchases at these lower prices or continue its current pause in acquisition activity.

MicroStrategy’s total Bitcoin holdings of 528,185 make it the largest publicly listed corporate holder of the cryptocurrency in the world.