MicroStrategy expects Q1 loss as bitcoin value falls

MicroStrategy appears to have lost the coin toss — the bitcoin toss, that is.

The world’s largest corporate bitcoin investor, Tysons-based MicroStrategy reported an expected first quarter loss in a Securities and Exchange Commission filing on Monday due to the falling value of its  holdings in the cryptocurrency.

After cresting at an all-time high of $100,000 in December 2024, bitcoin values fell below the $75,000 mark briefly on Monday.

MicroStrategy, which rebranded as Strategy in February, said in the SEC filing its unrealized loss on digital assets for the quarter ending March 31 was $5.91 billion. The tech company expects a resulting net loss for the quarter, although it will be “partially offset” by a related $1.69 billion income tax benefit.

Under the direction of bitcoin whale and company founder Michael Saylor, MicroStrategy announced its first bitcoin purchase in August 2020, making it one of the first public companies to convert its cash treasury reserves into cryptocurrency as a store of value. The company now has the largest bitcoin trove of any public company.

At the end of the quarter, the company held approximately 528,185 bitcoins, purchased for about $35.63 billion, averaging approximately $67,458 a coin. On March 31, the total value of its holdings was about $43.55 billion. MicroStrategy reported it did not purchase any additional bitcoin between March 31 and April 6.

According to Coinbase, the nation’s largest cryptocurrency exchange, as of 12:20 p.m. on Tuesday, bitcoin was selling for $78,000.26 — making MicroStrategy’s holdings worth about $41.2 billion.

MicroStrategy said it “may not be able to regain profitability in future periods,” particularly if it incurs “significant unrealized losses related to [its] digital assets.”

Additionally, MicroStrategy said in the filing, “A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations.”

The company could have to sell some of its bitcoin holdings to meet financial obligations, according to the SEC filing.

“As bitcoin constitutes the vast bulk of assets on our balance sheet, if we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell bitcoin to satisfy our financial obligations, and we may be required to make such sales at prices below our cost basis or that are otherwise unfavorable,” MicroStrategy said in the filing.

Despite the expected Q1 loss, Saylor, now MicroStrategy’s executive chairman, said Tuesday in a post on social media platform X: “Bitcoin is Digital Gold,” accompanied by a photo of himself sitting on blocks of gold with engraved bitcoin logos in front of a vault door.

MicroStrategy shares were trading for $268.74 as of 12:15 p.m. Tuesday, although at open, its shares were trading for $278.51.

Bitcoin was trading in the $80,000 range last week, even hitting $88,500 briefly on April 2 before dropping later in the day, and began a steep descent Sunday evening. On Monday, it dropped below $79,000.

Bitcoin’s drop comes amid worldwide stock market volatility. Global stock markets plunged for several days after President Donald Trump announced sweeping new tariffs on April 2, although markets opened higher on Tuesday.

Saylor has made bold pronouncements and statements about bitcoin in the past. In September 2024, he told CNBC that he thought the cryptocurrency could rise as high as $13 million per bitcoin by 2045, a prediction he repeated on Fox Business in December 2024, hours before bitcoin breached the $100,000 mark.

Saylor’s and MicroStrategy’s fortunes have turned before. He stepped down as CEO after MicroStrategy’s August 2022 earnings report, when the company disclosed that it had paid a total of $3.977 billion for its bitcoin, which at that time had fallen to a market value of about $2.451 billion. At that point, MicroStrategy also had taken on about $2.4 billion in loans and debt to acquire bitcoin. At points in 2022, the currency fell below $20,000 to prices it had not seen since 2020.