Strategy, the largest corporate holder of Bitcoin, reported an $8.22 billion net loss for the second quarter of 2026, driven almost entirely by an $8.32 billion unrealized markdown on its digital asset holdings after Bitcoin prices declined. The result marked a sharp reversal from the $10.02 billion net income the company recorded in the same period a year earlier.

As of July 26, Strategy held 843,775 Bitcoin, an 11 percent increase during the quarter and a 25 percent rise from the start of the year. The position carried an aggregate acquisition cost of approximately $63.7 billion against a recent market value of roughly $54.8 billion, placing the average cost basis near $75,476 per coin. Bitcoin fell about 14 percent during the second quarter, from around $68,000 at the beginning of April to roughly $58,600 by the end of June, and traded near $64,000 to $65,000 following the earnings release.

Unrealized Losses Dominate Results

Fair-value accounting rules required Strategy to mark its Bitcoin holdings to market, producing the bulk of the quarterly operating loss of $8.33 billion. The diluted loss attributable to common shareholders reached $24.45 per share after preferred dividends of about $400.7 million. Software revenue from the company’s core business rose 6.9 percent year over year to $122.4 million, with gross profit of $81.6 million.

President and Chief Executive Officer Phong Le said the firm strengthened its balance sheet while navigating the Bitcoin price decline. Convertible debt was reduced by 18 percent to approximately $6.7 billion after the company repurchased $1.5 billion of notes due 2029 at an 8 percent discount to face value. The U.S. dollar reserve expanded to $3.75 billion, a level the company stated is sufficient to cover existing preferred dividend payments and interest obligations for more than two years.

Shift Toward Liquidity and Monetization

In a departure from its long-standing practice of accumulating Bitcoin without selling, Strategy sold approximately $218.4 million of the cryptocurrency under a newly established BTC Monetization Program. Most of those sales occurred in early July after the quarter closed. Proceeds helped fund preferred stock dividends. The company has paused further Bitcoin purchases for several consecutive weeks to prioritize cash reserves.

Strategy also introduced a formal Digital Credit Capital Framework that includes a minimum dollar reserve target and authorization to sell up to $1.25 billion of Bitcoin when advantageous for building or replenishing the reserve or funding dividends. The firm raised more than $17 billion year to date through at-the-market equity offerings across common and preferred securities.

Capital Structure Actions and Stock Response

Strategy repurchased roughly $25 million of its STRC preferred shares at an average price of about $86.53, a discount of more than 13 percent to the $100 stated value. Management indicated it intends to continue disciplined open-market purchases while the securities trade below par. A separate $1 billion authorization for common stock repurchases has been established but remains unused.

The company reported a year-to-date Bitcoin yield of 4.5 percent and disclosed a new internal metric, BTC Hurdle ARR, of 10.8 percent, described as its current effective cost of credit. Shares of Strategy rose 4.7 percent during regular trading on the day of the report to close near $97.74, remaining largely stable in after-hours activity.

Strategy has maintained 18 consecutive months of preferred dividend payments without interruption. Management reiterated its objective for STRC to trade over time near $99 to $100 and stated that discounted repurchases reduce future dividend obligations while allowing market demand to establish sustainable pricing.