Strategy Reports $5.9 Billion in Unrealized Bitcoin Losses for Q1 2025

Key takeaways:

• Strategy projects a $5.91 billion paper loss from its Bitcoin holdings in Q1 2025.
• Bearish market trends follow President Trump's new tariffs on China and other trade partners.
• Crypto analysts remain optimistic about BTC rebounding despite economic tensions.

Strategy, formerly known as MicroStrategy, has disclosed no profits due to the drop in BTC price. In a recent filing on April 7, the company revealed it expects $5.91 billion in unrealized losses tied to its Bitcoin holdings, marking a major Strategy Bitcoin loss for Q1 2025.

Bitcoin Gamble Fails Despite Tax Relief

Strategy received a $1.69 billion tax benefit during Q1. It wasn't enough to offset mounting losses. The company currently holds 528,185 BTC purchased for $35.63 billion. 

Their average acquisition price was $67,458 per coin.

According to a recent 8-K filing, Strategy acquired 22,048 BTC for $1.92 billion between March 24 and March 30. The average Bitcoin price during that spree hovered around $86,969. 

Strategy raised $7.69 billion from share offerings in the same quarter. These funds fueled its aggressive Bitcoin accumulation strategy. The capital influx still couldn't shield the company from market volatility.

Bitcoin had fallen sharply by the quarter's end. It traded well below Strategy's average purchase price.

MicroStrategy, $MSTR, saus unrealized loss on digital assets for 1q $5.91 billion

— unusual_whales (@unusual_whales) April 7, 2025

Investors initially viewed Strategy as a winner under Trump's administration. His perceived crypto support and plans for a U.S. Bitcoin reserve boosted market sentiment.

BTC price soared to an all-time high, exceeding $108,000 during Trump's inauguration. This milestone momentarily validated Strategy's long-term investment thesis.

The celebration proved short-lived. Strategy's stock (MSTR) has plummeted 30.6% since inauguration day. Meanwhile, BTC price has dropped 27.28% from its peak.

The company's shares have nosedived 41.9% since reaching $473.83 post-election on November 20, 2024.

Trade Wars and BTC's Potential Rebound

Market conditions appear grim on the surface. BTC price briefly dipped below $74,500 late Sunday. It had traded near $83,000 hours earlier. 

This sudden drop rattled investors. The market quickly stabilized, with BTC recovering to approximately $79,143 by press time. This represents a 5.16% increase over 24 hours. President Trump's aggressive trade policies triggered the recent volatility.

Trump unveiled sweeping tariff measures on April 2, dubbing it “Liberation Day.” The plan includes a 10% tariff on all U.S. imports. Even higher duties target key trading partners, particularly China.

The reason Trump is calling today “Liberation Day”, is because if Trump’s tariff economic plan is successful, income taxes will be no more, and the American People will no longer be tax slaves to a corrupt system.

Today will be known as the day that ended our economic slavery.… pic.twitter.com/oefQ58aG8D

— Clandestine (@WarClandestine) April 2, 2025

However, China reacted swiftly, announcing a retaliatory 34% tariff on U.S. goods. 

Tensions like these often lead to downturns in stocks and crypto. However, some experts look at the current situation differently.

Arthur Hayes, co-founder of BitMEX, believes this trade war could trigger another Bitcoin bull run. He pointed out that a potential devaluation of the Chinese yuan (CNY) may spark capital flight into BTC. 

If not the Fed then the PBOC will give us the yachtzee ingredients.

CNY deval = narrative that Chinese capital flight will flow into $BTC.

It worked in 2013 , 2015, and can work in 2025.

Ignore China at your own peril. pic.twitter.com/LAOeQZEjZt

— Arthur Hayes (@CryptoHayes) April 8, 2025

Adding to that view, Ben Zhou, co-founder and CEO of Bybit, explained that when China weakens the Yuan to offset tariffs, Chinese investors often move their money into Bitcoin.

He said this has historically been a bullish signal for BTC price.

Strategy's current Bitcoin losses represent a significant warning sign. Yet, market dynamics could rapidly shift as global instability grows. The same losses might quickly diminish or even transform into gains.