If last weekend's crypto crash taught investors anything, it's not to celebrate too soon. The downturn didn't stop with the weekend; it rolled straight into the new week.
On Feb. 5, Bitcoin (BTC) slipped below the $63,000 mark , its steepest drop since September 2024, according to data from CoinGlass .
The pullback hit major crypto stocks hard, none more so than Michael Saylor's Bitcoin treasury company Strategy (NASDAQ: MSTR), earlier known as MicroStrategy.
The timing couldn't have been worse: the company has released its Q4 2025 financial results just as the market sentiment sours.
Related: Analyst predicts Bitcoin drop to $40K following $1T market wipeout
From enterprise software to Bitcoin treasury
Founded in 1989, Strategy spent decades as a traditional enterprise software company focused on data analytics. That changed dramatically around 2020, when co-founder Michael Saylor pivoted the firm toward Bitcoin as a treasury reserve asset.
Saylor's logic was simple: amid pandemic-era stimulus and low interest rates, holding cash felt riskier than holding Bitcoin. The company began converting its balance sheet into BTC, not as a trading play, but as a long-term hedge against monetary debasement. Over the years, it has emerged as the world's largest Bitcoin treasury company.
By 2025, the company had even rebranded to "Strategy." The shift, however, drew scrutiny from regulators, and index providers became uncomfortable with a publicly listed company functioning as a quasi-Bitcoin fund.
Tussle with MSCI and S&P 500
Last year, MSCI floated a proposal to classify firms like Strategy, whose balance sheets are dominated by digital assets, as non-operating companies . The idea: if over 50% of a firm's assets are crypto, it may not belong in indices such as the MSCI World Index.
Strategy pushed back hard. Saylor argued it remains an active business, using Bitcoin strategically to raise capital and enhance shareholder value, not a passive ETF.
At the same time, Strategy was fighting another battle for inclusion in the S&P 500. Twice, in September and December, it fell short.
Landing a spot on the coveted benchmark would have meant institutional credibility, passive inflows, and mainstream validation of its Bitcoin strategy.
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Bitcoin strategy proves risky
One of the biggest points of concern for Strategy has been its mNAV.
The company's market Net Asset Value (mNAV), which tracks how its market price compares with the value of its Bitcoin holdings, currently stands at 1.09.
While that reflects a small premium, it's a far cry from the exuberant multiples seen during Bitcoin's rallies. If mNAV drifts closer to 1.0, it signals fading enthusiasm; the market sees little upside beyond the underlying BTC.
With Bitcoin dropping to roughly $63,000—much below Strategy's average purchase price of $76,052, the firm's vast Bitcoin treasury is now underwater.
Strategy announces Q4 2025 results
On Feb. 5, Strategy posted earnings for the fourth quarter of 2025.
Net loss for the quarter was $12.4 billion, or $42.93 per MSTR common share on a diluted basis, as compared to $670.8 million, or $3.03 per share in Q4 2024.
Operating loss stood at $17.4 billion, as compared to $1 billion in Q4 2024.
Total revenues in Q4 stood at $123 million, with a gross profit of $81.3 million.
As of Dec. 31, 2025, the company had cash and cash equivalents of $2.3 billion. In contrast, it held only $38.1 million as of Dec. 31, 2024.
Strategy said the increase in cash reserves reflects the establishment of the USD reserve in Q4.
"Strategy's current intention is to maintain the USD Reserve at an amount sufficient to fund two to three years of its Dividends,"the company said.
As of Feb. 1, the company holds 713,502 Bitcoinacquired at a total cost of $54.26 billion, or $76,052 per coin. It achieved a 22.8% yieldon its BTC holdings in 2025.
"Strategy has built a digital fortress anchored by 713,502 bitcoins and our shift to Digital Credit, which aligns with our indefinite bitcoin horizon," said Saylor.
"MSTR and STRC operate as complementary components of our capital structure, with STRC generating amplification for MSTR investors and MSTR providing substantial asset coverage while absorbing bitcoin price volatility for STRC investors,"he added.
The MSTR stock closed at $106.99 on Feb. 5, down 17% in a day. The stock's year-to-date performance shows 30% drop, while the yearly data shows 68% fall.
Related: MicroStrategy never sold a single Bitcoin — even during market crashes
This story was originally published by TheStreet on Feb 5, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
