Shares of Strategy (NASDAQ: MSTR) (previously known as Microstrategy) declined in extended trading on Tuesday after the bitcoin-focused firm reported a significantly wider first-quarter loss, reflecting the impact of falling cryptocurrency prices on its large digital asset holdings.
The company, led by Michael Saylor, posted a net loss of $12.77 billion, or $38.25 per share, for the three months ended March 31.
This compares with a loss of $4.23 billion, or $16.49 per share, in the same period a year earlier.
The sharp increase in losses was primarily driven by a decline in the value of its bitcoin holdings, which the company records as losses under its accounting framework.
Bitcoin volatility weighs on earnings
The results highlight the sensitivity of Strategy’s financial performance to fluctuations in Bitcoin prices.
A downturn in bitcoin since October, compounded by heightened geopolitical tensions in the Middle East, has increased volatility across digital asset markets.
While bitcoin has partially recovered, it remains down about 7% so far in 2026.
This price weakness directly impacted the valuation of Strategy’s holdings, resulting in the substantial quarterly loss.
Despite the decline in asset values, the company continues to expand its bitcoin position.
As of May 3, Strategy held 818,334 bitcoins, representing a 22% increase year-to-date.
The holdings were valued at approximately $64.14 billion as of early May.
Shares of Strategy fell about 1.2% in extended trading following the earnings release, though the stock remains up roughly 23% so far this year.
Revenue growth and capital strategy
Amid the significant losses tied to bitcoin valuation, Strategy reported modest growth in its core business.
Revenue rose to $124.3 million from $111.1 million a year earlier, exceeding analyst expectations of $120.8 million, according to FactSet data.
However, the reported loss per share was far wider than forecasts, with analysts expecting a loss of $7.17 per share.
The company has also continued to raise capital to support its bitcoin acquisition strategy.
As of May 3, Strategy had raised $5.58 billion through STRC, its capital-raising digital credit vehicle.
It has paid out $692.5 million in cumulative dividends on STRC to date.
Institutional adoption contrasts with market risks
Despite near-term volatility, Strategy pointed to growing institutional adoption of bitcoin as a positive long-term trend.
“Adoption of bitcoin continues to grow in 2026. We also continue to see traditional finance and major banks including Morgan Stanley, Goldman Sachs and Citi announcing bitcoin ETFs, trading, custody and lending services,” CEO Phong Le said.
The broader digital asset landscape has seen increasing participation from major financial institutions such as Morgan Stanley, Goldman Sachs, and Citigroup, which are expanding offerings across trading, custody, and lending services.
At the same time, bitcoin’s recent price swings underscore the asset class’s vulnerability to macroeconomic uncertainty, including shifting expectations around US Federal Reserve policy and investor rotation toward safer assets.
For Strategy, the combination of aggressive bitcoin accumulation and market volatility continues to define its financial profile, with results closely tied to the performance of the cryptocurrency market.
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