Strategy posts $8.2B Q2 loss on $8.3B unrealized Bitcoin hit

Strategy reported an $8.22 billion net loss for the second quarter, driven by an $8.32 billion unrealized mark-to-market loss on its Bitcoin holdings after the cryptocurrency’s price declined during the period.

Bitcoin fell about 14% during the quarter, from roughly $68,000 at the start of April to about $58,600 at the end of June. On Thursday afternoon it traded near $64,700.

In regulatory filings, Strategy reported holding 843,775 Bitcoin on July 26, up 25% from the start of the year. The filing shows the company sold roughly $218.4 million of Bitcoin under a newly launched BTC monetization program to fund part of its preferred stock dividend obligations, with about $216 million of those sales occurring in early July after the quarter ended.

The company built a $3.75 billion U.S. dollar reserve intended to cover more than two years of preferred dividend payments and interest obligations. Strategy repurchased $25 million of its STRC preferred shares at a discount to par and plans to continue buying the securities while they trade below $100.

Shares rose about 4.7% during the regular trading session on the day of the earnings release, then slipped modestly in after-hours trading.

The $8.32 billion headline loss was an unrealized, mark-to-market loss on the company’s Bitcoin holdings. Unrealized losses reduce reported net income but do not necessarily represent cash outflows when a company holds dollar reserves or has monetized part of its crypto holdings.

The company has increased its Bitcoin holdings year to date. Price volatility affects quarterly reported results because the value of the holdings is recorded at current market prices for accounting purposes.