Strategy is not expecting a first-quarter profit, given billions of dollars in unrealized losses on its Bitcoin holdings, the company said on Monday.

The Tysons, Virginia-based firm—formerly known as MicroStrategy—said the value of its Bitcoin holdings fell $5.91 billion on paper in the first quarter, according to a filing with the Securities and Exchange Commission.

“We may not be able to regain profitability in future periods, particularly if we incur significant unrealized losses related to our digital assets,” the company said, adding that a $1.69 billion tax benefit should partially offset its unrealized losses in the first quarter.

Over the past week, Strategy did not purchase any more Bitcoin, leaving its holdings unchanged at 528,185 Bitcoin, worth around $41.3 billion. In the first quarter, Strategy spent $7.7 billion on Bitcoin, scooping the asset up for an average price of around $95,000 per coin.

As U.S. President Donald Trump’s tariffs have battered risk-on assets, Bitcoin’s price has dropped to a five-month low. Around noon Eastern Time, the leading digital asset was changing hands around $78,200, according to crypto data provider CoinGecko.

Since Strategy started buying Bitcoin in 2020, the company has spent $35.6 billion on the asset, acquiring it for an average price of $67,485 per Bitcoin, according to Saylor Tracker. Based on that average Bitcoin price, Strategy is up around 16.5% on its bet.

Strategy has taken on $8.2 billion worth of debt to buy more Bitcoin than it could otherwise, while issuing products like convertible debt and perpetual preferred stock. Between its so-called “Strife” and “Strike” offerings, Strategy is required to pay $146 million in dividends annually.

Before it became a Bitcoin-buying machine, Strategy was known for its enterprise analytics software business, which “has not generated positive cash flow” in recent periods and may not help it satisfy its financial obligations, according to the company.

In order to fulfill its financial obligations, Strategy said it plans to take on more debt, issuing common shares, or conduct more offerings of preferred stock and convertible debt.

Strategy hasn’t had a profitable quarter since the company posted an earnings per share of $0.32 on $124 million in revenue in the fourth quarter of 2023, according to Macrotrends.

On Monday, Strategy shares fell 10.6% to $262, according to Yahoo Finance. While notably off from last year’s peak of $543, it was still above its Election Day price of $233.

Edited by James Rubin

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