Strategy company's record-breaking quarter with a loss of $12.6 billion, Bitcoin's plunge triggers chain reactions of volatility in the DAT sector

In the early morning earnings call, Strategy Inc. (formerly MicroStrategy) announced a net loss of $12.6 billion for the fourth quarter, almost entirely due to unrealized losses on its massive Bitcoin holdings. This figure reflects the harsh reality of Bitcoin’s price dropping from its all-time high near $126,080 in October last year to the present, a decline of nearly 49%. As a pioneer in the digital asset treasury concept, the company is now facing the most severe test of the DAT model by the market.

Financial Storm

Bitcoin prices plummeted sharply in Q4 2025, pushing Strategy Inc. toward a financial cliff. According to disclosures, the company’s average cost basis for Bitcoin was approximately $76,052 per coin. This means that when Bitcoin’s price fell below this critical psychological level, the company’s entire holdings officially entered unrealized losses.

On the day of the earnings release on Thursday, Bitcoin’s price further dropped from about $73,100 to around $62,400, a nearly 15% single-day decline. This intense volatility directly drove Strategy’s market value of holdings into the abyss.

Accounting Changes

It is noteworthy that a significant portion of Strategy’s massive losses stems from the fair value accounting rules adopted in January 2025. This new regulation requires the company to record changes in the market value of Bitcoin holdings directly on the income statement quarterly. This contrasts sharply with the previous “cost basis impairment” model, which only recognized losses during irregular impairments. The implementation of the new rule has amplified the impact of market fluctuations on the company’s financial statements.

Valued at market price, the company’s operating loss for Q4 was approximately $17.4 billion, a figure comparable to the losses of some large financial institutions during the 2008 financial crisis.

Perseverance and Challenges

Despite market turbulence, Strategy Inc. appears to have not changed its core strategy. In January 2026 alone, the company increased its Bitcoin holdings by 41,002 coins. By early February, its total Bitcoin holdings reached 713,502 coins, valued at approximately $45.9 billion at current market prices.

This steadfast accumulation strategy aligns with statements from company executives during the earnings call. CEO Michael Saylor briefly posted the word “HODL” on X, while President and CEO Feng Le quoted the slogan from “The Hitchhiker’s Guide to the Galaxy”: “Don’t Panic.” CFO Andrew Kwon emphasized that Strategy has $2.25 billion in cash reserves, enough to cover two and a half years of dividend payments and debt interest.

DAT Sector Shakeup

Strategy’s predicament is not an isolated case; the entire digital asset treasury sector is experiencing severe selling pressure. DAT stocks typically trade at a premium relative to their underlying crypto assets, but as token prices have fallen back, many DAT stocks are now trading at discounts.

So far this year, the median return of DATs listed in the US and Canada is -17%, while the median return of S&P 500 component stocks is up 5%. Other DAT companies are also feeling the pressure. Bitcoin treasury company Empery Digital has begun selling Bitcoin to fund share buybacks. Ethereum treasury company ETHZilla, supported by Peter Thiel, also announced the sale of $74.5 million worth of tokens to pay off debt.

Dilemma for Bitcoin Concept Stocks

This predicament highlights the fragility of Bitcoin concept stocks during market downturns. Traditionally, investors buy these stocks to gain exposure to crypto assets, but when the underlying asset prices fall, these stocks often suffer even greater hits.

Analysts have begun to cut price targets, citing the dual impact of accounting losses and market volatility. Strategy’s stock price has fallen 75% from its peak near $435 in July last year. Fedor Shabalin, an analyst at B. Riley Securities, said, “That was a short-term excitement phase, and then investors started to realize: to get them to buy these stocks, to assign any premium relative to the underlying, these companies must generate additional earnings somewhere.”

Market Environment and Bitcoin Price

According to Gate data as of February 6, 2026, Bitcoin’s price is $64,918.1, with a 24-hour trading volume of $1.95 billion and a market cap of $1.56 trillion, accounting for 56.80% of the entire cryptocurrency market. The price has changed by -10.50% in the past 24 hours.

Based on Gate’s Bitcoin price forecast data, the average price in 2026 is expected to be $78,559.7, with a potential range between $58,134.17 and $85,630.07. By 2031, the forecasted price could reach $210,873.2, representing a potential return of +108.00% compared to the current price.

Notably, Strategy’s average purchase cost ($76,052) is close to Gate’s predicted average Bitcoin price in 2026 ($78,559.7), which may partly explain the company’s continued holding strategy.

As the cryptocurrency market and stock market resonate downward, Strategy faces challenges beyond financial losses. Its stock price has fallen 26%, from a premium more than double its Bitcoin holdings’ value to just a 9% premium. Has the DAT bubble burst? That is what the market is trying to determine. RIA Advisors portfolio manager Michael Lebowitz said, “If you want to hold Bitcoin, just hold Bitcoin directly. I think investors are finally starting to realize that.” The sharp fluctuations in Bitcoin prices on the Gate platform and the turbulence in the DAT sector form a reflexive relationship: falling prices reduce the value of DAT holdings, triggering stock sell-offs, which in turn affect market sentiment, creating a cycle.

As the search for the next catalyst in the Bitcoin market continues, all eyes are on the next moves of these digital asset treasury companies.