Bitcoin Treasury Model Under Fire: Strategy Posts Record Loss Amid Market Woes
Crypto just closed one of its ugliest earnings weeks in history after Strategy, the largest corporate holder of Bitcoin, reported an $8.22 billion net loss for the second quarter. This comes as Bitcoin itself has slipped below $63,000.
Strategy's operating loss was driven almost entirely by an $8.32 billion unrealized markdown on its digital assets under fair-value accounting, with a net loss of $24.45 per diluted share. The company held 843,775 BTC as of July 26, worth around $54.77 billion at the time of reporting.
Despite this massive loss, Strategy's capital structure has not become so complex that it is in immediate distress. However, investors are now scrutinizing the dividend machine closely, alongside the company's Bitcoin stack.
Coinbase followed with a $359 million loss and its third consecutive revenue miss, with revenue down 18.5% year over year to $1.22 billion. The problem lies in the total crypto market capitalization falling 11% quarter over quarter and spot trading volumes dropping 25%.