Why did Strategy still keep increasing Bitcoin holdings despite losing $17.4 billion last year?

Strategy (formerly MicroStrategy) looks to have a tough financial report for 2025: Q4 unrealized losses of $17.4 billion, an annual total loss of $5.4 billion, and a stock price plummeting by 47.5%. But strangely, after entering 2026, this company has actually accelerated its Bitcoin holdings. Behind this is a reflection of two very different mindsets among crypto market investors.

Last year’s “Paper Disaster”

First, let’s clarify what unrealized losses are. They are not actual losses, but a reduction in book value of held assets. Strategy holds over 670,000 Bitcoins. Last year, as Bitcoin retreated from its highs, the market value of these assets declined. When accounting standards incorporate these declines into financial reports, it results in a $17.4 billion “loss.”

But there’s a key detail: Strategy’s average cost basis is $75,026, while the current Bitcoin price is about $93,315. That means, on paper, the company still has an unrealized gain of $11.975 billion. The “loss” last year was simply because Bitcoin’s price fell from higher levels.

Market reaction behind the stock price decline

Strategy’s stock plunged 47.5%, reflecting market panic over crypto volatility. Many investors, seeing such large paper losses, think the company’s operations are problematic. But in reality, Strategy’s “problem” is that it has heavily invested in a highly volatile asset.

This was especially evident in 2025. Bitcoin’s performance throughout the year was below expectations, and Strategy even downgraded its profit forecast in December. The market’s reaction was to sell off the stock. But this also highlights a phenomenon: short-term investors and long-term investors interpret the same event very differently.

Why continue to add?

The most interesting part is Strategy’s subsequent actions. According to recent news, in the week of January 2026, Strategy spent another $116 million to acquire 1,287 more Bitcoins. What does this mean?

Long-term confidence remains unshaken

Michael Saylor, founder of Strategy, has never hidden his stance: he views Bitcoin as digital gold and a core part of corporate asset allocation. Last year’s paper losses do not change this judgment. On the contrary, when prices dip, they see a cheaper buying opportunity.

Average cost basis continues to improve

Strategy’s average cost basis is $75,026. Although the current price of $93,315 is above cost, what does continuous accumulation imply? If Bitcoin continues to rise, the average cost basis becomes less significant; if it pulls back, new purchases will lower the overall cost. This is a typical long-term allocation mindset.

Market landscape is changing

At the start of 2026, crypto-related stocks generally rose. Coinbase up 5.6%, Strategy up 4.35%. This indicates market sentiment is recovering. Strategy’s accumulation behavior is also a bottom-fishing move during this window.

What does this reflect?

Strategy’s story reveals a fundamental contradiction in the crypto market: the dislocation between short-term volatility and long-term trend.

For short-term traders, $17.4 billion in unrealized losses is indeed alarming, enough to cause a stock price crash. But for long-term holders, this is just noise in the process. Strategy remains the world’s largest publicly listed Bitcoin holder, owning 3.21% of the total supply.

This also shows that in the crypto market, the real logic of making money is often simple: believe in the long-term trend and stick through volatility. Last year’s “disaster” financial report actually became a reason for Strategy to increase holdings this year.

Summary

Strategy’s unrealized loss of $17.4 billion in Q4 last year is indeed shocking, but fundamentally it reflects crypto market volatility, not a failure of corporate strategy. More noteworthy is that despite the stock price plunging and poor financial reports, Strategy continues to buy more Bitcoin. This indicates that long-term capital confidence in crypto assets remains intact.

The lesson for investors is clear: distinguish between book value fluctuations and actual worth, and maintain rationality amid intense market swings. Strategy’s approach may not suit everyone, but its core logic — sticking to long-term judgment in panic — is worth contemplating.