Market Analysis

Bitcoin Bet Deepens: Strategy Reports Loss, Unveils Crypto-Focused Rebrand

Amos Simanungkalit · 06 Feb93.5K Views

Image Credit: Reuters

Strategy, the largest corporate holder of Bitcoin, posted its fourth consecutive quarterly loss on Wednesday due to an impairment charge on its cryptocurrency holdings.

The Virginia-based company recorded a $1.01 billion impairment loss from digital assets in the quarter, a sharp increase from $39.2 million a year earlier. Previously known as MicroStrategy and founded by Michael Saylor, the firm has significantly benefited from Bitcoin’s growing popularity. Its stock surged nearly fivefold last year, securing a place in the Nasdaq 100 index in December.

Strategy began purchasing Bitcoin in 2020 as its software business revenue declined. Last year, the company announced plans to raise $42 billion over three years to acquire more Bitcoin. So far, it has completed $20 billion of that plan and, as of February 2, held approximately 471,107 Bitcoins valued at $46 billion.

In the fourth quarter, the company made its largest-ever Bitcoin acquisition, buying 218,887 Bitcoins for $20.5 billion. Looking ahead, Strategy plans to focus more on fixed-income issuance, including convertible bonds and preferred stock, CEO Phong Le stated during a post-earnings call.

For the quarter ending December 31, the company reported a net loss of $670.8 million, or $3.03 per share, compared to a profit of $89.1 million, or 50 cents per share, in the same period last year.

Starting in the first quarter, Strategy will adopt a new accounting rule that allows it to measure Bitcoin holdings at fair value. CFO Andrew Kang noted that this will be the last quarter in which the company recognizes an impairment charge on its Bitcoin assets.

Earlier on Wednesday, Strategy announced its rebranding, unveiling a new logo and reaffirming its commitment to Bitcoin. The company described the change as a "natural evolution," aligning its identity with its role as the world’s "first and largest Bitcoin Treasury Company."

Bernstein analyst Gautam Chhugani suggested the rebranding reflects Strategy’s shift away from its software business, which is no longer a key focus. The new logo features a stylized "B," symbolizing the company’s dedication to its Bitcoin-centric strategy.