MicroStrategy Faces Record Losses from Bitcoin Drop

In the fourth quarter of 2025, MicroStrategy, the company aggressively investing in Bitcoin, encountered significant financial challenges amid a decline in BTC prices. According to recent data, the company recorded an unrealized loss of $17.44 billion due to the devaluation of its digital assets. This occurred after Bitcoin fell 24-25%, from $114.1K at the end of September to around $88.7K by the end of December. Such losses completely negated the $2.8 billion profit earned in the previous quarter and highlighted the vulnerability of the company's model, which relies on BTC as its primary asset.

MicroStrategy's shares (MSTR) dropped nearly 70% from their 2024 peak, with an overall decline of 48% in 2025. The company's corporate value is approaching parity with the value of its Bitcoin assets, sparking growing skepticism among investors about the sustainability of this strategy. As of late December 2025, MicroStrategy held approximately 672,497 BTC, valued at around $60 billion, purchased at an average price of $74,997 per coin. While the overall holdings still yield an unrealized profit of 17%, the recent price drop has brought it close to the average purchase price, risking a shift into loss territory.

As we have previously written about MicroStrategy, the company, led by Michael Saylor, has transformed from a software provider into the largest corporate holder of Bitcoin, implementing a "Bitcoin-first" strategy. In earlier coverage, we highlighted its active BTC purchases in 2024-2025, including billions in acquisitions that led to significant fluctuations in financial metrics. For instance, in the first quarter of 2025, the company incurred unrealized losses of $5.91 billion, while the second quarter saw a profit of $14.05 billion thanks to BTC price recovery. However, Q4 2025 has become one of the worst periods, prompting analysts to forecast annual results ranging from a $7 billion loss to a $9.5 billion profit.

Market research indicates that the Bitcoin drop in Q4 is linked to broader factors, such as regulatory changes and macroeconomic events. Analysts warn of a potential "flash crash" for BTC if MicroStrategy is forced to sell assets to cover expenses. Additionally, the company's recent purchases, including 13 transactions in 2025, are already showing losses of up to 25%. This underscores the risks of aggressive dollar-cost averaging during market peaks.

In the context of the crypto industry, MicroStrategy's situation could become a "black swan" event for the market, impacting investor confidence in corporate Bitcoin strategies. The company continues to buy BTC, for example, $116 million in the last week, but skeptics doubt its liquidity and ability to withstand further declines. Investors are advised to monitor the upcoming Q4 report for a full assessment of the impact.