Strategy reports $14.46 billion unrealized Bitcoin loss in Q1 amid treasury growth

• Strategy recorded a net loss of $12.54 billion in Q1, primarily driven by a $14.46 billion unrealized loss on its digital asset holdings.
• The firm expanded its Bitcoin position to 818,334 BTC, a 22% year-to-date increase.
• STRC emerged as a major driver of growth, raising $5.58 billion year-to-date and reaching an $8.5 billion market cap within nine months.

Bitcoin (BTC) treasury firm Strategy on Tuesday reported its first-quarter results, highlighting a significant unrealized loss on its BTC holdings even as the company continued to expand its balance sheet and scale its Digital Credit offerings.

The company posted a $14.46 billion unrealized loss tied to its Bitcoin reserve, which drove an operating loss of $14.47 billion and a net loss of $12.54 billion for the quarter. 

Unrealized BTC losses weigh heavily on Strategy's Q1 performance

The losses reflect accounting adjustments to the market value of its Bitcoin holdings during a period of price volatility, rather than realized sales.

Despite the scale of the losses, Strategy maintained a strong balance sheet position, ending the quarter with $2.21 billion in cash and cash equivalents. The firm also reported Q1 revenue of $124.3 million, up 11.9% year-over-year, with a gross margin of 67.1%, indicating continued strength in its business operations.

The firm currently holds 818,334 BTC, a 22% year-to-date increase. The company's Bitcoin holdings are valued at approximately $64.14 billion.

A key driver of Strategy's growth has been its STRC Digital Credit product. The instrument has raised $5.58 billion since the beginning of the year — a 189% growth — and has reached an $8.5 billion market capitalization within nine months. The firm argued that this makes STRC the largest preferred stock globally by market capitalization.

"Adoption of Bitcoin continues to grow in 2026. Digital Credit, highlighted by STRC, has been a big success. STRC has shown strong demand, high liquidity, and low volatility," said Phong Le, President and CEO at Strategy.

The product has recorded daily trading volumes of up to $375 million and maintained volatility at approximately 3%, even during a broader downturn in Bitcoin markets. 

Strategy now has more than $13.5 billion in preferred equity outstanding, backed by its Bitcoin reserves.

It also reported a 9.4% BTC yield, generating a net gain of 63,410 BTC, equivalent to nearly $5 billion, in the first four months of the year. This expansion was supported by $11.68 billion raised through at-the-market equity offerings.

Strategy's stock MSTR is down 4% in after-hours trading after a three-point gain earlier in the day.