Preeminent bitcoin treasury company Strategy reported a $17.44 billion unrealized loss in the fourth quarter of 2025 due to the crypto asset’s underperformance near the end of the year. Digital asset treasury companies like Strategy surged in popularity during 2025, attracting investors seeking amplified exposure to bitcoin and other crypto assets. These entities vary in structure, but the basic idea is to accumulate as much bitcoin (or some other cryptocurrency) through debt issuance as possible in the hope that long-term price accumulation will more than offset borrowing costs.
Strategy, which was originally founded as MicroStrategy in 1989 as a business intelligence software provider, stands as the largest and most established example of a bitcoin or digital asset treasury company. The company began acquiring bitcoin in August 2020 with an initial $250 million purchase, but by early June 2025, its stash reached 581,000 BTC valued at around $63 billion, dwarfing its annual software revenue of $463 million.
Strategy’s massive Q4 loss stems from fair-value accounting rules adopted last year, which mandate marking bitcoin holdings to market prices in earnings reports. This shift has caused volatile swings for the company; however, it’s important to remember these are strictly paper losses, as Strategy has never sold any bitcoin.
Despite the Q4 losses, Strategy continued accumulating bitcoin last week, buying 1,287 BTC for $116 million at an average price of $90,000. These latest purchases pushed its total to 673,783 BTC acquired for $50.55 billion overall, or $75,026 per coin on average. Strategy also bolstered its cash reserves to $2.25 billion, ensuring coverage for 32.5 months of dividend payments on its perpetual preferred equity. This move is intended to address potential liquidity concerns, as bitcoin generates no income and the software arm produces minimal positive cash flow.
Skeptics of the Strategy model, such as noted gold bug Peter Schiff, have labeled the company and similar firms as nothing more than outright Ponzi schemes, reliant on constant inflows to sustain operations. Yet this critique echoes decade-old attacks on bitcoin itself, which has weathered multiple cycles while growing in adoption.
.@Saylor claims MSTR’s business is issuing digital credit by selling preferred stock that pays 8% or 10% dividends if $MSTR declares them. But as MSTR has no income, unless it sells Bitcoin it can only pay dividends by selling more preferreds. In other words, it’s a Ponzi scheme.
— Peter Schiff (@PeterSchiff) November 30, 2025
Notably, a fresh worry centers on Strategy’s market dynamics. Specifically, the company’s enterprise value, including debt and preferred stock, hovered at $61 billion recently, nearing parity with the value of its total bitcoin holdings for the first time in over two years. Strategy’s stock (MSTR) plunged 48% over the course of 2025 and nearly 70% from its November 2024 peak. At a $105.28 billion market cap in mid-2025, shares traded at a 70% markup over holdings.
The basic concern is that the doomsday scenario related to Strategy’s hypothetical failure would involve a downward spiral where Strategy has to sell bitcoin to pay its creditors. Skeptical analysts see a lack of a premium on Strategy’s market valuation as compared to its bitcoin holdings as a sign of a lack of faith in the business model. Notably, a number of smaller bitcoin treasury companies are already trading at valuations far below their holdings.
Strategy counters that such metrics overlook its foundational value proposition as a leveraged wager on bitcoin’s historical outperformance. The company uses metrics like bitcoin-per-share (BPS) and bitcoin yield to show their increased accumulation rather than focusing on short-term price dynamics. The company’s chairman, Michael Saylor, sees bitcoin as the foundational layer for credit issuance in the digital age, so the name of the game for him is, again, to simply acquire as much bitcoin as possible in the coming decades. Of course, Saylor has also described Strategy’s business model as an “infinite money glitch,” which is the kind of statement critics point to as a sign that what’s being offered is simply too good to be true.
Imagine a bank powered by Bitcoin. pic.twitter.com/svrtfbuX2y
— Michael Saylor (@saylor) November 25, 2025
While Strategy inspired a number of copycats in 2025, the original remains the benchmark by which this emerging concept of bitcoin treasury companies is measured. The firm claims it can sustain its operating model for prolonged, multi-year bitcoin bear markets, but the crypto asset’s 2026 trajectory remains unclear. Some cite institutional inflows and ETF approvals as evidence the four-year halving cycle may be fading, while others predict this will be a downyear for the crypto market. That said, with bitcoin rebounding above $94,000 this week, there are more signs that this time may indeed be different.