Shares of Strategy (NASDAQ: MSTR) slipped about 1% on Monday after the company disclosed a significant decline in the value of its bitcoin holdings and confirmed sales of bitcoin to cover preferred stock dividends and rebuild cash reserves.
In a regulatory filing, Strategy reported an $8.32 billion total loss on digital assets for the three months ended June 30, 2026. That figure comprised $8.31 billion in unrealized losses and $0.9 million in realized losses recorded during the quarter. The company said the bitcoin sales were executed to fund preferred stock distributions and to replenish the firm’s USD reserve.
Strategy sold bitcoin in two tranches. Between June 29 and June 30 it sold 1,363 bitcoin for proceeds of $80.8 million at an average price of $59,256 per coin. It followed that with a sale of 2,225 bitcoin between July 1 and July 5 for $135.2 million, at an average sale price of $60,773 per bitcoin. Proceeds from these transactions were allocated to preferred distributions and to increase the company’s USD liquidity.
As of the quarter end on June 30, Strategy held 846,000 bitcoin with a carrying value of $49.67 billion. The aggregate amount paid for those holdings was $63.94 billion, which the filing shows equates to an average purchase price of $75,578 per bitcoin. By July 5, total holdings had declined modestly to 843,775 bitcoin, reflecting the late-June and early-July sales.
The company also disclosed that its cost basis in bitcoin exceeded fair value as of June 30. That divergence required Strategy to record a valuation allowance against a deferred tax benefit and the deferred tax asset tied to the unrealized losses realized in the quarter.
Strategy’s USD reserve stood at $2.55 billion as of July 5. The company previously announced a BTC Monetization Program on June 29 that authorizes up to $1.25 billion of incremental bitcoin sales to bolster the reserve; the filing stated that the full monetization capacity remained unused as of July 5.
During the interval from June 29 through July 5, Strategy did not issue any shares under its at-the-market offering program and likewise did not repurchase shares under its share repurchase programs, according to the filing.
In corporate governance changes disclosed in the same filing, Strategy designated Andrew Kang, Executive Vice President and Chief Financial Officer, as principal accounting officer effective June 30. That designation followed the retirement of Jeanine Montgomery.
Key takeaways
- Strategy reported an $8.32 billion digital-asset loss for Q2 2026, made up of $8.31 billion unrealized and $0.9 million realized losses.
- The company sold 3,588 bitcoin between June 29 and July 5, raising roughly $216 million to fund preferred distributions and replenish cash reserves.
- Strategy’s bitcoin holdings stood at 846,000 coins on June 30 with a carrying value of $49.67 billion and an average purchase price of $75,578; holdings fell to 843,775 bitcoin by July 5.
Risks and uncertainties
- Valuation risk: The company’s cost basis exceeds fair value, necessitating a valuation allowance against deferred tax items tied to unrealized losses.
- Liquidity and funding usage: Continued use of bitcoin sales to fund preferred distributions could affect the scale of the company’s crypto holdings and its USD reserve balance.
- Market exposure: Material unrealized losses on digital assets expose equity value to further market volatility and price swings in bitcoin.