Strategy's Q2 Earnings Set to be Dominated by Massive Bitcoin Loss

Strategy's Q2 earnings report is expected to be dominated by its massive unrealized loss on Bitcoin holdings. The company has 843,775 BTC sitting underwater at an average cost of $75,476, with the current market price hovering around $64K.

The stock is already down ~77% from its 52-week high and trading at $97.01 (+3.94% today), setting up a volatile reaction to the earnings report. The real story isn't the software business, but rather the significant impact of Bitcoin's price swings on Strategy's financials.

Under fair-value accounting, every Bitcoin price swing creates enormous paper gains or losses. Last quarter, EPS came in at -$38.25 vs. -$18.98 est (a -101.5% miss), largely due to Bitcoin mark-to-market carnage.