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Investing.com -- Shares of Strategy Inc (NASDAQ:MSTR) fell 9.7% in premarket trading following the company’s announcement of a substantial unrealized loss on its bitcoin holdings. The firm, previously known as MicroStrategy Inc , disclosed a $5.91 billion loss on digital assets for the quarter ended March 31, 2025, which is expected to lead to a net loss for the same period, despite a partial offset by a related income tax benefit of $1.69 billion.
The loss comes as a result of the company’s adoption of Accounting Standards Update No. 2023-08, which mandates that any increases or decreases in the fair value of crypto assets be recognized in the Consolidated Statements of Operations. This update is set to take effect on January 1, 2025, and will also require that the fair value of the company’s bitcoin be reflected within the Consolidated Balance Sheets at each reporting period’s end.
In addition to the unrealized loss, Strategy informed stakeholders that it had not engaged in the sale of any class A common stock or 8.00% Series A Perpetual Strike Preferred Stock, nor had it purchased additional bitcoin in the week following the close of the quarter. This lack of activity in both equity and bitcoin markets may also have contributed to investor concerns, as the company appears to be holding its position amidst a significant valuation decrease in its digital asset portfolio.
The news marks a significant financial impact for Strategy, which has been known for its substantial investments in Bitcoin. The update to the accounting standards and the resulting large unrealized loss have clearly rattled investors, leading to the sharp decline in the company’s stock value ahead of the market opening.
As the company navigates these new accounting requirements and assesses its digital asset strategy, investors will be closely monitoring Strategy’s future financial disclosures and management’s plans to mitigate the impact of volatile crypto asset valuations on its balance sheet.
As of 9:20 ET, Bitcoin was down 6.3%, after staying relatively steady during the tariff chaos of last week. This could be disheartening for Strategy investors, as digital assets are identified as economic safe havens in times of uncertainty.
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