Strategy Inc. closed the first quarter of 2026 with a massive mark-to-market hit on its Bitcoin treasury, reporting an approximate $14.46 billion unrealized loss as falling prices sharply reduced the carrying value of its digital-asset holdings. The decline came after Bitcoin dropped about 23.8% during the quarter, leaving the company’s portfolio valued at $51.65 billion as of March 31, 2026.
Even with that paper loss, the company did not retreat from its core treasury strategy. Strategy continued buying Bitcoin while absorbing the accounting impact of lower prices, reinforcing its long-term exposure even as fair-value rules amplified quarterly volatility on the balance sheet.
Fair-value accounting turned Bitcoin’s decline into a major quarterly shock
The reported loss was driven by fair-value accounting, which required Strategy to reprice its Bitcoin holdings to market as prices moved lower. That accounting treatment converted Bitcoin’s market decline directly into a large unrealized loss, even though the company did not reduce its holdings during the quarter.
The tax effects added another layer to the quarter’s financial picture. Strategy recognized a $2.42 billion deferred tax benefit linked to the unrealized loss, while also recording a $1.73 billion deferred tax asset that was fully offset by a valuation allowance because the company did not expect to realize that benefit in the near term.
By the end of March, the company’s Bitcoin position remained underwater relative to its average acquisition cost. Strategy held 766,970 BTC with an aggregate cost basis of about $58 billion, while the portfolio’s carrying value stood at $51.65 billion, reflecting the gap between its average purchase price and quarter-end market levels.
The company kept buying despite the loss
The most striking part of the update is that the buying never stopped. Between April 1 and April 5, 2026, Strategy acquired another 4,871 BTC for roughly $330 million at an average price near $67,718, which was below its broader average purchase price of $75,644.
Those purchases were funded the same way Strategy has been funding much of its Bitcoin accumulation: through the capital markets. The company continued relying on at-the-market sales of Class A common stock and preferred offerings, preserving its Bitcoin exposure while tying the next phase of accumulation to investor appetite for its securities.
That financing engine remains substantial. In the final days of March, Strategy raised about $299.3 million through share sales, followed by another $174.6 million in the first days of April, while also expanding its fundraising capacity with a new $21 billion STRC preferred program, a concurrent $21 billion MSTR offering, and a new $2.1 billion STRK issuance.
The quarter ultimately highlighted the two forces now defining Strategy’s model. Bitcoin volatility is feeding directly into earnings and equity through fair-value accounting, while ongoing equity-funded purchases are preserving upside exposure but increasing the company’s dependence on market confidence, capital access and future Bitcoin appreciation.
