​Michael Saylor's company, Strategy (formerly MicroStrategy), is preparing to announce an unrealized $5.9 billion loss for the first quarter of 2025. This comes after Strategy incorporated the fair-value accounting system from the Financial Accounting Standard Board (FASB) when it was released on Dec 16, 2024. As per the FASB's accounting standards, digital assets are valued at their market price.

Prior to implementing the fair value accounting system, Strategy classified its large Bitcoin holdings as intangible assets. This meant that they would only require impairments in the case of price depreciations and would not be able to mark up for price increases unless the assets were sold.

Under the new rules, gains and losses must be recognized in every period that ends in a month based on the number of tokens, aligning the book value of digital assets with their market value. ​The transition to a fair-value accounting system, which was widely adopted in the first quarter of 2025, seeks to offer a more accurate picture of asset values but brings substantial volatility to financial statements.

Between Jan 1 and Mar 31, 2025, Strategy spent some $1.92 billion to buy 22,048 bitcoins at an average bitcoin buy price of $86,969. As of Apr 7, the company owns 528,185 Bitcoins, which it acquired at an average price of $66,384.56, according to its Treasury report.

The drop in the cost of Bitcoin below the $79,096.38 level from over $83,000 has resulted in significant unrealized losses. However, according to reports, the losses will be partially offset by $1.69 billion in income-tax benefits.

The company has been active in capital markets amid these financial pressures, securing share offerings worth $7.69 billion in the quarter. This new capital pledge solidifies the company's resolve on its Bitcoin acquisition strategy, even with market fluctuations. Notably, Strategy has never sold its Bitcoin holdings since starting its acquisition in 2020.

At the time of writing, Strategy's stock MSTR is trading at $14.98, down by 5.11% in the last 24 hours.