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How bitcoin price changes enter Strategy’s earnings
Strategy adopted the accounting standard ASU 2023-08 on January 1, 2025. Under the adopted method, the company remeasures bitcoin at fair value at each reporting date and recognizes the change in net income or loss. A rise in fair value can produce a gain; a fall can produce a loss.
These are unrealized fair-value changes: they reflect the carrying value of bitcoin at the reporting date, not a sale of the holdings. A large unrealized loss can therefore weigh heavily on reported earnings even though it is not, by itself, a cash outflow. Adoption increased Strategy’s opening retained earnings by $12.7 billion, an accounting adjustment to the opening balance rather than cash generated by operations.
Why older comparisons need care
Before adopting ASU 2023-08, Strategy used a cost-less-impairment model for bitcoin. Its $1.0 billion digital-asset impairment loss in Q4 2024 was measured under that previous approach. A comparison with later fair-value results crosses an accounting-method boundary: subsequent periods recognize fair-value changes each reporting period, so the size and direction of reported losses and gains may not be directly comparable.
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What the reported quarterly results show
Strategy’s results illustrate how bitcoin valuation can dominate the headline earnings figures. The periods below are not all measured under the same accounting method: Q4 2024 preceded adoption, while the other periods shown followed it.
| Period | Reported result | Bitcoin-related figure and context |
|---|---|---|
| Q1 2025 | Strategy reported a $5.9 billion unrealized fair-value loss on digital assets. | At March 31, 2025, Strategy reported 528,185 BTC, a market price of $82,445 per bitcoin, and an average cost of $67,457. |
| Q2 2025 | $14.03 billion operating income and $10.02 billion net income. | Operating income included a $14.05 billion unrealized bitcoin gain. |
| Q4 2025 | $17.4 billion operating loss and $12.4 billion net loss. | The operating loss included a $17.4 billion unrealized digital-asset loss. |
| Q2 2026 | $8.33 billion operating loss and $8.22 billion net loss, or $24.45 per diluted common share. | The operating loss included an $8.32 billion unrealized digital-asset loss. |
In Q2 2026, the unrealized digital-asset loss accounted for nearly all of the reported operating loss. The contrast with Q2 2025 shows how a reversal in bitcoin fair value can accompany a sharp reversal in headline results. The figures are Strategy’s reported results for their respective quarters; they do not establish that software operations or cash moved by the same amounts.
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How to read earnings alongside software operations and liquidity
Strategy’s operating loss and net loss are accounting results, not a direct measure of cash available to meet obligations. The large digital-asset fair-value line can dominate operating results, while software revenue and gross profit describe the company’s software business. Those operating measures should be read separately from bitcoin valuation. The cited quarterly figures do not provide software revenue or gross profit amounts, so they cannot establish how that business performed in those periods.
Liquidity is another distinct question. At June 30, 2026, Strategy reported $1.71 billion in cash and cash equivalents and $736.1 million in short-term investments. Those are balance-sheet figures at the quarter-end date. They do not, on their own, show the company’s net financial position: that assessment also requires reviewing debt, preferred-stock obligations, maturities, and other liabilities in the financial statements.
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Why the July 2026 bitcoin snapshot is not a June 30 balance-sheet figure
Strategy’s Q2 2026 results release, published July 30, 2026, reported the quarter ended June 30, but its separate bitcoin holdings summary used later dates. The summary listed 843,775 BTC as of July 26, with an original cost basis of $63.69 billion and a market value of $54.77 billion based on an approximately $64,915 bitcoin price on July 27.
Do not combine those July holdings and valuation figures with the June 30 cash and investment balances as if they were one same-date balance sheet. The holdings snapshot is later than quarter-end, and its market value is a valuation at a different price date. Original cost basis and market value also answer different questions: the first describes the reported acquisition cost basis, while the second reflects the stated market-price snapshot.
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What Strategy’s bitcoin-per-share metrics mean—and do not mean
Strategy also reports company-defined bitcoin metrics that are distinct from GAAP earnings, standard valuation measures, and liquidity measures:
- Bitcoin Per Share: gross bitcoin holdings divided by assumed diluted shares outstanding, expressed in satoshis.
- BTC Yield: the percentage change in Bitcoin Per Share over a reference period.
- BTC Gain: the implied bitcoin-denominated change associated with that measure.
- BTC $ Gain: BTC Gain translated into dollars using a specified bitcoin market price.
For interim periods, Strategy describes a reference-period method, typically year-to-date. A quarterly figure should not automatically be read as a stand-alone return for that quarter. Nor is BTC Yield an investment yield or a measure of shareholder return.
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Strategy cautions that these KPIs are not measures of financial performance, valuation, or liquidity. Their calculations do not account for liabilities or preferred stockholders’ senior rights to dividends and assets in liquidation; they also rely on assumptions about debt refinancing or conversion that may not occur. As a result, gross BTC-per-share metrics can overstate or understate the bitcoin exposure attributable to common stockholders. They should not be treated as a substitute for reviewing the balance sheet and claims senior to common equity.
Quick Recap
A practical way to interpret Strategy’s reports
- Start with the accounting period and method. Check whether the period is before or after the January 1, 2025 adoption of fair-value accounting.
- Separate the bitcoin valuation line from operating activity. Identify the unrealized digital-asset gain or loss, then read software revenue and gross profit separately where reported.
- Match every bitcoin figure to its measurement date. A later holdings snapshot or market-price date is not automatically the quarter-end balance-sheet amount.
- Assess liquidity and obligations together. Cash and short-term investments are useful inputs, but debt and preferred-stock claims are needed to understand what is available to common stockholders.
- Read company-defined KPIs as supplementary measures. Check their reference period and assumptions; do not equate BTC Yield or BTC $ Gain with GAAP earnings or shareholder return.
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