MicroStrategy Inc. (MSTR) fell about 5% on January 6, extending a year-long slide that wiped roughly half its value in 2025 and left the company sharply exposed to Bitcoin volatility. The decline underscored growing investor doubts about the firm’s strategy of holding Bitcoin as a treasury asset and the financial stress tied to that bet.
Data from the company’s recent disclosures showed a $17.44 billion unrealized loss in Q4 2025 after Bitcoin fell about 25% in the quarter. That paper loss followed a year in which MSTR’s market capitalization fell to roughly $47 billion, trading below the estimated value of the company’s Bitcoin holdings, which the company placed at about $60 billion.
Analysts noted that market reactions were immediate: Bitcoin’s roughly 1.9% 24‑hour slide toward $92,000 coincided with a mid-single-digit move in MicroStrategy shares, reinforcing the tight correlation between the two.
Shares moved in step with Bitcoin after the cryptocurrency dipped near $92,000, highlighting how MicroStrategy had effectively become a leveraged proxy for BTC rather than a traditional enterprise software company.
Capital structure, accounting changes and strategic risk
Investors also focused on MicroStrategy’s leverage. The company carried about $8.2 billion of debt, raising questions about its ability to service obligations without selling Bitcoin. In late November 2025, CEO Phong Le acknowledged the possibility of selling holdings under specific crisis conditions, a departure from the long-standing accumulation ethos associated with Michael Saylor.
Michael Saylor’s oft-cited maxim — “never sell” — had been a cornerstone of the firm’s narrative, but disclosures and management comments in late 2025 suggested that the company’s flexibility on that stance had increased.
Compounding market unease, new accounting standards adopted in Q1 2025 required MicroStrategy to mark its Bitcoin holdings to fair value each quarter. That change produced large swings in reported earnings that tracked Bitcoin’s price movements and amplified volatility in the stock’s reported results.
A brief reprieve arrived when MSCI decided not to exclude digital-asset treasury companies from its indexes, but that decision provided only temporary relief and did not reverse the underlying sell-off.
Investors will now be watching whether Bitcoin stabilizes and whether MicroStrategy can service its debt and meet cash obligations without tapping its BTC reserves. The company’s ability to convert headline Bitcoin holdings into durable financial flexibility will be the practical test of this strategy going forward.
