In a move that continues its strong focus on Bitcoin, Strategy has announced a capital plan for the remainder of 2025 to expand its BTC holdings and boost its yield target. The plan, which will see the firm raise $21 billion through common shares and another $21 billion through fixed income securities, comes after the company reported a first-quarter loss of $4.2 billion.
The startup reported a record loss for the first quarter of 2025 due to a new accounting rule that will now factor any unrealized gains or losses on Bitcoin directly into earnings. The company previously classified its Bitcoin as intangible assets, where gains were only realized upon sale of the assets and any losses from price drops were permanently recorded. However, the new accounting standard, ASU 2023-08, which was approved late last year, required companies to begin reflecting gains or losses from digital assets at prevailing market prices in their earnings. This resulted in a substantial unrealized loss for Strategy at the end of the quarter, with Bitcoin priced at $82,445.
However, the company said its financial performance has since improved. Based on an estimated current Bitcoin price of around $97,300, Strategy anticipates a fair value gain of about $8 billion for the second quarter thus far. This dramatic swing in financial results showcases the volatility that the updated accounting rules will bring, particularly for companies with large digital asset holdings.
Strategy’s latest fundraising efforts will include a substantial $21 billion sale of equity, building upon the complete utilization of a similarly sized equity program launched in October of the previous year. Along with this, the company is introducing a $21 billion issuance of fixed income securities, bringing the total capital to be raised under this new plan to $42 billion.
These aggressive financial moves are expected to aid Strategy in expanding its current Bitcoin portfolio, which now stands at 553,555 BTC.
Mark Palmer, an analyst at Benchmark, noted that the increasing demand for Bitcoin from corporate buyers could further enhance Strategy’s already strong market position. He suggests that if other companies begin to emulate Strategy’s balance sheet strategy of accumulating Bitcoin, it could indirectly contribute to a rise in Bitcoin prices, ultimately benefiting Strategy’s own valuation. However, Palmer cautions that this potential effect remains contingent upon overall market conditions and other external factors.
Despite the substantial first-quarter loss attributed to the new accounting rules, Strategy reported a strong start to 2025, boasting a 13.7% year-to-date yield on its Bitcoin holdings and a $5.8 billion gain on the cryptocurrency. This gain represents 58% of the company’s annual yield target, achieved within the first four months of the year.
These figures highlight the potential returns on Strategy’s significant cryptocurrency holdings, even amidst the volatility introduced by the new accounting standards. As CFO Andrew Kang stated, these early-year figures already cover over 90% of the firm’s entire 2025 yield goal.
Meanwhile, Strategy’s stock performance continues to reflect strong investor interest in its Bitcoin-centric strategy, having surged by nearly 3,000% since 2020.
However, David Trainer of New Constructs offered a more cautious perspective, noting that Strategy’s dramatic transformation followed a period of stagnation and raising concerns about the long-term sustainability of this highly focused approach.
