A deep market correction has resulted in multi-billion dollar losses for MicroStrategy, the largest corporate holder of Bitcoin. This is detailed in a report from the company founded by Michael Saylor.
The operational loss reached $17.4 billion, primarily due to unrealized losses on Bitcoin reserves. The net loss was $12.6 billion, compared to $671 million the previous year.
MicroStrategy's shares closed around $107, dropping to approximately $100 in after-hours trading. The stock has lost over 70% compared to last year's values, losing the premium investors had previously assigned.
According to Messari, MicroStrategy's losses are comparable to those of giants like AIG, Fannie Mae, and Freddie Mac during the 2008 crisis.
Expert analysis shows that the February Bitcoin crash resulted in an additional $14 billion in unrealized losses. Consequently, the total decline in asset value since the end of the year has approached $31 billion.
As of early February, MicroStrategy holds 713,502 BTC. A significant portion of these reserves was accumulated during the late 2024 rally when Bitcoin's price briefly exceeded $126,000. The average purchase price for Bitcoin is around $76,000.
Just four months ago, when prices were at historical highs, the "paper" profit of the "treasury giant" reached $31 billion.
Michael Saylor responded to the current situation with a succinct post on X: "HODL".
Until It Drops to $8,000
MicroStrategy CEO Fong Lee assured investors of the company's balance sheet resilience amid the market correction.
During a webinar discussing fourth-quarter results, the executive clarified that debt servicing risks would only arise in an extreme scenario: if Bitcoin were to crash to $8,000 and remain at that level for 5–6 years.
"In the event of an extreme price drop of Bitcoin by 90% to $8,000, our reserves would equal our net debt. We would then be unable to repay convertible bonds with Bitcoin and would have to resort to restructuring, issuing new shares, or taking on new debt," Lee stated.
Chief Financial Officer Andrew Kang emphasized the company's commitment to a long-term approach, adding:
"Even amid volatility, we continue to execute our strategy."
Saylor supported this assertion.
"Such quarterly fluctuations can be sharp and concerning. However, it is important to emphasize that our strategy is designed for the long term. It is built to withstand short-term volatility and even extreme conditions like those we are witnessing today," he stated.
The founder of MicroStrategy urged investors to focus on positive fundamental factors, including favorable regulatory shifts.
The Quantum Threat
Saylor also addressed the quantum threat to Bitcoin. The executive dismissed the relevance of these risks, labeling them as part of a "parade of terrible FUD".
"The consensus is that it will be at least 10 years before a real threat emerges. The technology is promising but still in its early stages," he noted.
The entrepreneur emphasized that quantum computers pose a threat not only to Bitcoin but also to the financial and defense sectors, which rely on traditional cryptography.
According to Saylor, significant investments are already being made in developing protective protocols. The Bitcoin network will receive necessary updates through a "global consensus".
"Bitcoin is upgradable; it can be made more secure. We believe humanity will rise to the challenges and find rational technical solutions," stated the founder of MicroStrategy.
To achieve consensus on quantum resilience, the company will launch the Bitcoin Security program, which aims to collaborate with cybersecurity experts and the crypto community.
Saylor also highlighted the "strong positions of the firm":
"We have effective management, reliable backing, and a responsible structure. This allows us to endure tough months, quarters, and even multi-year cycles. We have done this before and are ready to continue in the future."
It is worth noting that in December, MicroStrategy's head Fong Lee emphasized that he is not overly concerned about Bitcoin's short-term dynamics.