The 670,000 BTC dilemma of Strategy: Q4 losses of billions, paper profits vanish overnight

According to the latest news, Strategy may disclose a multi-billion dollar loss in its Q4 2025 earnings report. This former business intelligence software company has transformed into a Bitcoin asset management firm but is facing a book crisis due to a 24% drop in Bitcoin prices—potentially wiping out its $2.8 billion profit in Q3. This reflects a fundamental truth: when a company bets all its chips on a single asset, price volatility brings not just numerical fluctuations but survival pressure.

The Dilemma Behind the Numbers

The scale of the loss

Strategy holds approximately $60 billion in Bitcoin assets. Amid a 24% decline in Bitcoin in Q4 2025, the company faces a multi-billion dollar paper loss. What does this mean? According to relevant information, Strategy has accumulated 672,000 Bitcoins, accounting for 3.2% of the total global supply, with a total investment of about $50.44 billion, and an average holding cost of $74,997 per Bitcoin.

Currently, Bitcoin is priced at $91,313.76. From a cost perspective, Strategy remains in a book profit. But the problem is, the price fluctuations in Q4 are enough to offset all of Q3’s profits.

Warning Signs of Company Valuation

Even more concerning is that Strategy’s enterprise value is nearing the edge of falling below the value of its Bitcoin holdings. This means the market’s valuation of the company itself has been severely depressed, with investors no longer believing in its corporate value but only in its Bitcoin assets. This is a dangerous signal, often indicating extreme market pessimism about the company’s prospects.

Two Major Market Concerns

Possibility of selling BTC

When a company’s valuation is on the verge of falling below its holdings’ value, the market begins to worry: Will Strategy be forced to sell Bitcoin to maintain operations or satisfy investors? Large-scale selling could further depress Bitcoin prices, creating a vicious cycle.

Liquidity pressure

To address these concerns, Strategy established cash reserves by selling common stock on December 1. According to relevant information, these cash reserves are sufficient to support the company’s operations until August 2028. This is a prudent defensive move, indicating that management has recognized the risks and is actively responding.

But it also raises another issue: diluting equity to raise cash itself puts pressure on shareholders.

Effectiveness of the Response Measures

Strategy’s approach is clear: build cash reserves to avoid forced selling. To some extent, this alleviates the market’s biggest concern—the company will not sell Bitcoin assets due to cash pressure.

However, on a deeper level, this only delays the problem and does not fundamentally solve it. According to Strategy’s earlier projections, the full-year operational performance will range from a $7 billion loss to a $9.5 billion profit, assuming Bitcoin trading prices stay between $85,000 and $110,000. This indicates that the company’s breakeven point is highly sensitive—every fluctuation in Bitcoin price directly impacts financial performance.

The Significance of Policy Support

A noteworthy background is that analysts at JPMorgan and others have raised Bitcoin’s fair value target to nearly $170,000. Meanwhile, a U.S. executive order plans to establish a strategic Bitcoin reserve. These policy supports could be key to changing the situation.

If Bitcoin prices can stabilize or even rise, Strategy’s book crisis will be automatically resolved. Moreover, policy-level recognition of Bitcoin as a reserve asset could provide medium-term support for Bitcoin prices. From this perspective, Strategy’s predicament depends not only on its own operations but also on macro policy environment and Bitcoin’s market performance.

Summary

Strategy’s dilemma reflects a deeper risk: when a company bets all its chips on a single asset, value fluctuations are no longer just a numbers game but a test of survival. The $2.8 billion profit in Q3 was wiped out instantly by the Q4 price decline. This is not an exception but a systemic risk that large holders inevitably face.

Strategy’s measures (cash reserves, avoiding sales) demonstrate risk awareness, but the fundamental solution still relies on Bitcoin’s price stability and policy support implementation. In the coming months, whether Bitcoin can hold above $90,000 and even approach JPMorgan’s expected $170,000 will directly determine Strategy’s financial outlook. For investors holding Strategy stock, this is not just a gamble on Bitcoin’s price but also a test of policy support and market confidence.