Strategy reported an $8.22 billion unrealized loss for the second quarter of 2026, a sharp reversal from the nearly $10 billion profit it posted during the same period last year.
The company said the loss was primarily driven by paper losses on its Bitcoin holdings, reflecting the significant decline in the cryptocurrency's market price compared with a year earlier. By the end of the second quarter, Bitcoin was trading more than 40% lower than it had at the close of Q2 2025, pushing the value of Strategy's digital asset portfolio below its average cost basis.
Despite the market downturn, Strategy expanded its Bitcoin holdings by approximately 11% during the quarter, reaching a peak of 846,000 BTC before later reducing its position. According to the company's latest Form 8-K filing, it currently holds 843,775 BTC, remaining the world's largest corporate Bitcoin holder.
Company Prioritizes Cash Reserves
Strategy has temporarily shifted its focus from aggressive Bitcoin accumulation to strengthening its U.S. dollar reserves.
The company has paused Bitcoin purchases for five consecutive weeks, choosing instead to improve liquidity after its STRC preferred stock traded below its intended $100 price target.
So far in 2026, Strategy has sold approximately $218 million worth of Bitcoin to help fund dividend payments on its preferred shares. It also announced the repurchase of 288,930 STRC shares for $25 million under the buyback program introduced in June.
During the earnings announcement, CEO Phong Le highlighted several improvements to the company's financial position despite the difficult quarter.
He revealed that Strategy reduced its convertible debt by 18% to $6.7 billion while increasing its U.S. dollar reserve by 12% to $2.4 billion during the quarter.
New Capital Strategy Takes Shape
In late June, Strategy formally introduced its Digital Credit Capital Framework, designed to strengthen the company's balance sheet while maintaining its Bitcoin-focused strategy.
The framework establishes a minimum U.S. dollar reserve sufficient to cover 12 months of preferred stock dividends and interest obligations, which were valued at approximately $1.76 billion when the plan was adopted.
Strategy also authorized a Bitcoin Monetization Program, allowing the company to sell up to $1.25 billion in Bitcoin when doing so is more efficient than issuing additional common stock. The proceeds may be used to replenish cash reserves or finance preferred dividend payments.
He added that repurchasing shares below their target price reduces future dividend obligations while supporting a healthier long-term market for the security.
Strong Liquidity Despite Market Weakness
Strategy's Chief Financial Officer Andrew Kang said the company has continued to improve its liquidity despite Bitcoin's sharp decline.
According to Kang, Strategy's U.S. dollar reserve has now increased to approximately $3.75 billion, providing enough liquidity to cover preferred stock dividends and interest obligations for roughly two years.
Investors responded cautiously to the earnings report. Strategy shares gained roughly 5% during regular trading, before remaining largely unchanged in after-hours trading at around $97.21.
Although the company posted one of its largest quarterly accounting losses to date, the results largely reflected unrealized market movements rather than realized operating losses, while management continued prioritizing liquidity and long-term financial stability alongside its Bitcoin investment strategy.
