The strategy, which is the $64 billion bitcoin treasury company led by Michael Saylor, has one primary goal: acquire as many bitcoins as possible as quickly as possible. However, the company posted 11-figure losses for the second consecutive quarter, as the price of bitcoin is currently well below the all-time high of $125,000 reached in October of last year. Even so, Strategy has continually sought new sources of financing that have allowed it to continue purchasing bitcoins in 2026.
In its results report for the first quarter of 2026 Posted on Tuesday, Strategy reported a net loss of $12.54 billion, which followed $17.44 billion in losses for the last quarter of 2025. The overwhelming portion of those figures consists of unrealized declines associated with the lower price of bitcoin. The company has never sold any of the bitcoins it has acquired; however, seems increasingly open to that eventual possibility. Its reserve now stands at 818,334, or approximately 3.9% of the entire bitcoin supply. These holdings currently have a market value of $64.14 billion and the price of bitcoin is around $78,000.
Despite the large unrealized losses that appear on paper, the company that invented the corporate bitcoin treasury model used the earnings release to highlight the performance of its digital credit instrument called Stretch or STRC. Stretch is the strategy’s Perpetual Stretch Series A variable rate preferred stock. Investors buy shares of this preferred equity product and the company funnels the profits directly into the purchase of bitcoins. Holders receive variable-rate dividends backed by the company’s bitcoin holdings, which the company and its supporters expect to increase substantially over time. The instrument has attracted $5.58 billion so far this year and more than $8 billion in the nine months since its original launch.
To put it more simply, the strategy is basically to borrow money at 11% per year (at current rates) and use it to buy bitcoins because they believe that the price of the crypto asset will increase by more than 11% per year. The company is effectively a leveraged play on bitcoin. That said, previous financing mechanisms involved much lower costs of borrowed capital.
“Strategy is the dominant issuer of digital credit in the world, with more than $13.5 billion in preferred shares outstanding, backed by a strong Bitcoin balance sheet,” said Strategy CFO Andrew Kang. “We continue to build on our dividend payment history, having met our payment obligations on time and in full on 23 consecutive distributions, totaling more than $693 million since the launch of our preferred stock products in early 2025.”
While unrealized losses have come under scrutiny, Strategy remains focused on increasing bitcoin holdings per share rather than chasing dollar-denominated quarterly profits. The company measures success through metrics such as BTC performance, which reached 9.4% in the first four months of 2026, and added around 63,410 bitcoins to its treasury during that stretch. Executives believe bitcoin will continue to expand its role as a global and apolitical reserve asset and therefore increase in value over time.
Strategy CEO @phong refuted my claim that $STRC It is a Ponzi scheme arguing that it is “transparent” and “very clear what we are doing.” But I never accused Strategy of hiding the plan. On the contrary, I called STRC the most obvious Ponzi precisely because $MSTR He’s very open about it.
—Peter Schiff (@PeterSchiff) May 3, 2026
It is not difficult to find critics of Strategy’s general approach, and some describe it as a complete Ponzi scheme. Peter Schiff, the veteran gold advocate and bitcoin skeptic who runs Euro Pacific Capital and predicted the 2008 housing crisishas called Strategy’s STRC product is “the most obvious Ponzi scheme.” He also noted that just because the company is completely transparent about what it is doing doesn’t mean it isn’t a Ponzi scheme.
The strategy has also been compared to investment trusts. which gained popularity during the stock market boom of the 1920s and ultimately contributed to the crash of 1929. Those vehicles used substantial leverage to acquire shares of emerging technology companies. The analogy has appeared often since the publication of Andrew Ross Sorkin’s recent book, 1929, which details the events leading up to that accident. That said, Sorkin himself has avoided claiming that Strategy faces the same kind of devastating outcome.
It remains an open question whether the model will hold up through the next crypto cycle or collapse Ponzi-style, but for now investors continue to supply the capital that allows Strategy to continue growing its bitcoin hoard.
