Strategy, the Bitcoin treasury company formerly known as MicroStrategy, reported an $8.2 billion net loss for the second quarter on July 30, as a sharp decline in Bitcoin’s price forced a large writedown on its holdings. The company (Nasdaq: MSTR) remains the largest institutional holder of Bitcoin in the world, with 843,775 BTC as of July 26; but for the first time in years, that stack is now worth less than Strategy paid for it, and the firm is selling small amounts of it to cover dividend payments.
The result answers most of the questions The Crypto Times flagged going into the call: the stack is underwater, the losses are on paper, and the “never sell” era is firmly over.
An $8B loss that is mostly a Bitcoin markdown
Strategy reported a net loss of $8.22 billion, or $24.45 per diluted share, compared with net income of $10.02 billion in the same quarter a year earlier. The loss attributable to common shareholders was larger still at $8.62 billion, after $400.7 million in preferred-stock dividends. The company’s operating loss of $8.33 billion included an $8.32 billion unrealized loss on its digital assets.
The word “unrealized” is doing most of the work. Under the accounting rule Strategy adopted in 2025 (ASU 2023-08), the company must mark its Bitcoin to market value at the end of every quarter and run the change, up or down, straight through net income, whether or not a single coin is sold. When Bitcoin falls, Strategy books a loss on paper; when it rises, a gain. The mechanism cuts both ways: the same rule turned a roughly $14 billion unrealized gain into that $10 billion profit a year ago. Neither figure reflects how the underlying business is run.
That underlying business, i.e. the enterprise analytics software operation that predates the Bitcoin pivot, remains a small fraction of the story. Software revenue was $122.4 million, up 6.9% year-over-year, at a 66.6% gross margin.
Underwater on Bitcoin for the first time since 2023
The more consequential number is the position itself. As of July 26, Strategy’s 843,775 BTC carried an original cost basis of $63.69 billion but a market value of $54.77 billion, roughly $8.9 billion below what the company paid. That works out to an average purchase price of about $75,476 per Bitcoin against a market price of roughly $64,915 as of July 27, leaving the holdings around 14% underwater.
It is a milestone for a company whose entire thesis is accumulating and holding Bitcoin. Strategy’s holdings first slipped beneath their cumulative cost around the start of 2026, drawing renewed scrutiny of the Bitcoin-heavy model.
Still accumulating, and now selling
Strategy grew its holdings by about 11% during the quarter, to roughly 846,000 BTC at June 30, funded by an aggressive capital-markets push. It raised $17.06 billion year-to-date through its at-the-market (ATM) equity program, where shares are sold gradually into the open market, and cut its convertible debt by 18% to $6.71 billion, including a May repurchase of $1.5 billion of its 2029 convertible notes at an 8% discount to face value.
At the same time, the company is doing something it long swore it never would: selling Bitcoin. Through a new BTC Monetization Program, Strategy has sold approximately $218.4 million of Bitcoin year-to-date to help fund its preferred-stock dividends, which is why holdings edged down to 843,775 by July 26 even as the quarterly total rose. The shift from one-way accumulation to active selling to service dividends has been building since the first quarter, when executives first signaled they would no longer rule it out.
The dividend engine, and the reserve behind it
Those dividends are now central to Strategy’s structure. The company has built a suite of preferred securities, trading under tickers including STRC, STRK, STRF, and STRD, that function like fixed-income instruments offering Bitcoin-linked exposure, and it has paid $1.06 billion in cumulative preferred dividends to date. CFO Andrew Kang emphasized an 18-month record of never missing a payment through the downturn.
To reassure holders, Strategy has grown what it calls its USD Reserve to $3.75 billion as of July 26, enough, it says, to cover preferred dividends and interest for more than 2.1 years. It also raised the dividend rate on its STRC preferred to 12% to support the security trading near its $100 stated value, and began buying STRC back below that level, purchasing about $28.9 million in notional value at an average of $86.53 per share, a roughly 13% discount, with about $975 million of that buyback program remaining. A separate $1 billion program to repurchase MSTR common stock has not yet been used. Strategy also said it expects its preferred distributions to be treated as a non-taxable return of capital, a return of investors’ own principal rather than taxable income, for the foreseeable future.
The metric that stays green in a red quarter
Strategy also highlighted its proprietary Bitcoin KPIs, and here readers should tread carefully. The company reported a “BTC Yield” of 4.5% and a “BTC $ Gain” of $1.95 billion year-to-date; both positive, in a quarter with an $8.2 billion loss. Those figures do not offset or contradict the loss, and they are not profit. They measure whether Strategy’s capital raising has increased the amount of Bitcoin backing each share (its “Bitcoin per share”), not whether the company made money.
Strategy itself cautions that BTC $ Gain “may be positive during periods when the Company has incurred fair value losses on its Bitcoin holdings,” and that these metrics are not measures of financial performance, valuation or liquidity, and can overstate the picture once the senior claims of lenders and preferred holders are accounted for.
The bull and bear cases
Strategy’s leadership framed the quarter defensively. President and CEO Phong Le described the company as strengthening its balance sheet while navigating “a meaningful Bitcoin price decline,” pointing to reduced debt and the growing cash reserve. Founder and Executive Chairman Michael Saylor characterized the moment as a phase of “muted Bitcoin sentiment and market skepticism,” and reiterated the goal of establishing what the company calls Digital Credit as a new asset class.
Skeptics see structural risk: investor Michael Burry has warned that sustained price declines could pressure leveraged corporate Bitcoin holders, and short-seller Jim Chanos has repeatedly questioned the reliance on debt-funded, non-earning assets. Which reading proves right depends largely on Bitcoin’s price and Strategy’s continued access to cheap capital, neither of which the company controls, and neither of which this report attempts to predict.
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