Strategy, formerly MicroStrategy, reported a record $10 billion net income in Q2 2025, driven by a $14 billion unrealized gain on its Bitcoin holdings, which grew 20% to 597,325 BTC at an average cost of $70,982 per coin. The profit, a 1,783,860% year-over-year surge, was fueled by Bitcoin’s price rising to $107,752 by June 30, 2025, under new fair-value accounting rules.
The company filed a $4.2 billion STRC preferred stock offering to fund further Bitcoin purchases, part of its “21/21 Plan” to raise $42 billion by 2027. Strategy also introduced modified net asset value (mNAV) guidelines, limiting common stock issuance when shares trade below a 2.5x premium to Bitcoin holdings, unless used for debt or dividend obligations.
This reflects Strategy’s aggressive Bitcoin treasury strategy, though critics highlight risks from leverage and Bitcoin’s volatility. Strategy’s $10 billion Q2 profit, driven by a $14 billion unrealized gain on its 597,325 BTC holdings, underscores the success of its Bitcoin-centric treasury strategy. The adoption of fair-value accounting (FAS 157) allowed Strategy to recognize Bitcoin’s price appreciation (to $107,752 by June 30, 2025).
The $4.2 billion STRC preferred stock offering signals Strategy’s continued commitment to increasing its Bitcoin reserves under the “21/21 Plan” ($42 billion by 2027). This move reinforces its position as the largest corporate Bitcoin holder, potentially increasing its influence in the crypto market. The modified net asset value (mNAV) guidelines, restricting common stock issuance unless shares trade at a 2.5x premium to Bitcoin holdings, aim to protect shareholder value.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
Strategy’s aggressive Bitcoin accumulation could drive demand, potentially pushing Bitcoin prices higher, especially given its $64.4 billion Bitcoin portfolio (as of Q2 2025). However, this also ties Strategy’s financial health closely to Bitcoin’s volatility, posing risks if prices decline. The STRC offering, if successful, could set a precedent for other corporations to use capital markets to fund crypto investments, potentially increasing institutional demand for Bitcoin.
Strategy’s use of debt and preferred stock offerings to fund Bitcoin purchases introduces significant financial leverage. A sharp decline in Bitcoin’s price could strain its balance sheet, especially with $4.2 billion in new obligations. The mNAV guidelines may signal to investors that Strategy prioritizes Bitcoin holdings over traditional business operations, potentially alienating those skeptical of crypto’s long-term value.
Prospects for Institutional Adoption of Bitcoin
Strategy’s success—$10 billion in profits tied to Bitcoin—may encourage other corporations to allocate portions of their treasuries to Bitcoin, especially those with excess cash seeking inflation hedges or high-return assets. The STRC offering demonstrates how companies can use capital markets to fund crypto investments, potentially inspiring similar offerings. This could lead to broader institutional adoption as companies see a viable path to integrate Bitcoin into their balance sheets.
The adoption of fair-value accounting for digital assets (e.g., FAS 157) makes Bitcoin more attractive for institutions, as unrealized gains can be reflected in financial statements, improving reported earnings. Bitcoin’s price volatility (e.g., potential drops from $107,752) remains a significant deterrent for risk-averse institutions, particularly those with fiduciary duties to shareholders.
Companies like Tesla or Square (Block), which have previously dabbled in Bitcoin, may follow Strategy’s lead, especially tech firms with high cash reserves. Financial institutions, such as hedge funds or asset managers, could also increase Bitcoin allocations, viewing it as a portfolio diversifier. Sectors like manufacturing or retail, with lower risk tolerance, are less likely to adopt Bitcoin soon, preferring stable assets or traditional investments.
Strategy’s success could boost demand for Bitcoin ETFs and institutional-grade custody solutions, as seen with firms like Fidelity or Coinbase Institutional, making it easier for companies to enter the market. High-profile corporate adoption could normalize Bitcoin as a reserve asset, potentially reducing stigma and encouraging central banks or sovereign wealth funds to explore crypto holdings.
Strategy’s $10 billion profit and $4.2 billion STRC offering highlight its leadership in corporate Bitcoin adoption, potentially inspiring other institutions to follow suit. The mNAV guidelines reflect a cautious approach to balancing shareholder value with crypto exposure. While Strategy’s success could accelerate institutional adoption, particularly in tech and finance, barriers like volatility, regulation, and operational complexity may slow broader uptake.