Strategy, the software company turned largest corporate holder of bitcoin, reported an $8.2 billion net loss for the second quarter, driven almost entirely by an $8.32 billion unrealized markdown on its bitcoin holdings under fair-value accounting rules. The company now holds 843,775 BTC, up 25% since the start of the year, but the position's acquisition cost of $63.7 billion now sits well above its current market value of roughly $54.8 billion — an unrealized loss of about $8.9 billion.
The scale of the paper loss reflects how directly Strategy's balance sheet now tracks bitcoin's price. Since adopting fair-value accounting, every quarterly swing in bitcoin translates almost one-for-one into the company's reported earnings, regardless of whether any coins are actually sold.
A cash buffer built for the downturn
Strategy has raised $17.06 billion through at-the-market stock offerings so far in 2026 and used part of that capital to repurchase $1.5 billion of its convertible notes at an 8% discount. The company has also built a $3.75 billion cash reserve specifically earmarked to support its preferred stock obligations.
Our USD Reserve currently stands at $3.75 billion, which is enough to cover our existing preferred dividend payments and interest obligations for more than 2.1 years.
That reassurance from CFO Andrew Kang comes after investors raised questions about the sustainability of Strategy's growing stack of preferred securities, which carry fixed dividend obligations regardless of how bitcoin performs.
A shift toward selling
In a departure from its long-standing buy-and-hold posture, Strategy sold $218.4 million worth of bitcoin under a newly introduced BTC Monetization Program. The company also repurchased roughly $25 million of preferred shares at a discount, and separately authorized a $1 billion common stock buyback program, though no shares had been repurchased under that authorization as of the report.
Framing the losses as part of a broader strategy
Executive Chairman Michael Saylor characterized the results as part of an evolving business model rather than a setback, saying the company continues to “establish Digital Credit as a new asset class.” The framing underscores Strategy's bet that its capital markets machinery — equity issuance, convertible debt and preferred stock — can absorb bitcoin's volatility over the long run, even as short-term accounting losses mount.
