The primary cause of losses was unrealized, so-called paper losses due to the decline in Bitcoin, whose price fell 40% below last year’s level. Unrealized loss reflects the difference between the company’s total investment in Bitcoin and the market value of these assets on a specific date. During the quarter, Strategy increased its holdings of the first cryptocurrency by 11%, or 29,997 coins, reaching a peak of 846,000 Bitcoin, after which it began selling off a portion of its assets.
Total revenue for April–June increased 6.9% year-over-year to $122.4 million, compared to $114.5 million. The Bitcoin reserve’s return year-to-date was 4.5%, amounting to $1.95 billion. The average cost basis per Bitcoin in the company’s reserve at the time of reporting was approximately $75,476. Since the creation of the crypto reserve in 2020, its return has declined by nearly 15%, with losses exceeding $9 billion.
According to the reporting, since the beginning of the year, the company has sold approximately $218 million worth of Bitcoin. These funds were used to pay dividends on preferred shares. Strategy retains 843,775 BTC. Over the past five weeks, Strategy has not made any cryptocurrency purchases. According to CEO Phong Le, the proceeds from Bitcoin sales enabled Strategy to reduce its debt by 18% to $6.7 billion in the second quarter, while simultaneously increasing its dollar reserves by 12%. The current fiat cash reserve stands at $3.75 billion—sufficient to cover approximately two years of dividend and securities interest payments.
“Our goal is for STRC shares to trade in the $99–100 range over time. If the price of STRC falls below $100, we intend to regularly and systematically repurchase shares, scaling the repurchase volume based on market price and liquidity,” said Le.
In late June, the company officially approved a new business strategy aimed at establishing a minimum fiat reserve sufficient to cover preferred dividend payments and interest obligations for 12 months. The business strategy permits the sale of up to $1.25 billion in Bitcoin when it is more advantageous than issuing additional MSTR common shares.
This week, Strategy purchased 288,930 preferred STRC shares for $25 million as part of the buyback program launched in June.