Strategy company earns 2.8 billion USD in a single quarter! Bitcoin reserve model self-reinforcing cycle

Strategy announced a net profit of 2.8 billion USD for the third quarter of 2025, achieving a significant return to profitability compared to a loss of 340 million USD in the same period last year. The company holds 640,808 Bitcoins, valued at approximately 47.44 billion USD. Strategy reaffirmed its expectations for full-year operating revenue of 34 billion USD and Bitcoin earnings of 20 billion USD.

Third quarter profit surge comes from Bitcoin appreciation

(Source: Strategy)

Strategy announced a net profit of 2.78 billion USD for the three months ended September 30, equivalent to 8.42 USD per share. In comparison, there was a loss of 340.2 million USD in the same period last year, which equated to a loss of 1.72 USD per share. The quarterly operating income reached 3.9 billion USD. This reversal from loss to substantial profit is primarily attributed to the rise in Bitcoin prices and changes in accounting standards.

The company's profits mainly come from the earnings on its Bitcoin holdings. As of October 26, 2025, Strategy holds 640,808 Bitcoins, with a total value of $47.44 billion and an average purchase cost of $74,032 per coin. The current trading price of Bitcoin is approximately $107,833, giving the company substantial unrealized gains. Based on the current price, Strategy's Bitcoin holdings have appreciated by about 45.7% compared to the cost price, with unrealized gains exceeding $21.6 billion.

Strategy Bitcoin Reserve Holdings Details

Holding Amount: 640,808 BTC (the largest holding among global enterprises)

Total Market Capitalization: 47.44 billion USD (calculated at current price)

Average Cost: 74,032 USD / coin

Unrealized Gains: Approximately 21.6 billion USD (current price vs cost price)

Such a scale of Bitcoin holdings is unprecedented in the corporate world. In comparison, the second largest corporate holder, Tesla, holds about 11,509 Bitcoins, while Strategy's holdings are more than 55 times that of Tesla. This extreme concentration of holdings ties Strategy's fate closely to the price of Bitcoin; for every 1% increase in Bitcoin, the market value of Strategy's Bitcoin reserves increases by approximately $470 million.

CEO Michael Saylor announced the performance on X: “Strategy released its Q3 2025 results and reiterated its guidance for 2025. Q3 results: Revenue of $3.9 billion, net income of $2.8 billion, diluted earnings per share of $8.42.” Saylor has been the most steadfast corporate advocate for Bitcoin, transforming Strategy from a traditional business intelligence software company into a Bitcoin treasury company. This radical strategic shift sparked huge controversy when it began in 2020, but has proven to be extremely successful today.

The change in accounting standards allows unrealized gains to be realized

Until the fourth quarter of last year, Strategy Company could only recognize impairment losses when the price of Bitcoin fell below its purchase price. Unless Bitcoin is sold, the benefits of price increases cannot be realized. The change in accounting treatment now allows the company to recognize the gains brought by the appreciation of Bitcoin. This shift in accounting standards has fundamentally changed the financial statements of Strategy Company.

The company can now announce quarterly profits that reflect the market value of its Bitcoin holdings. This enhances the economic transparency of its Bitcoin fund management strategy. Under the old accounting standards, Strategy's financial reports often showed losses, even though its Bitcoin positions were actually appreciating significantly. This divergence between accounting and economic reality made it difficult for investors to assess the company's true value.

The new accounting standards require companies to measure digital assets at fair value and reflect unrealized gains and losses at the end of each reporting period. This means that an increase in Bitcoin prices can be directly reflected as current profits, without having to wait for an actual sale. For companies like Strategy that adopt long-term holding strategies, this change is extremely beneficial, as they can demonstrate profitability without selling Bitcoin.

This accounting treatment also makes Strategy's Bitcoin reserve strategy easier for traditional investors to understand and accept. When the quarterly report clearly shows a net profit of $2.8 billion, it is easier to attract institutional investors' attention compared to complex explanations of unrealized gains. This is also an important reason why Strategy's stock can be included in certain index funds and ETFs.

Self-reinforcing Cycle of Bitcoin Reserve Model

The business model of Strategy has evolved into what industry insiders refer to as a “Bitcoin treasury company.” The company's strategy is to use Bitcoin as its primary treasury reserve asset. This buy-and-hold strategy fundamentally changes the way the market assesses the company's value. The rising price of Bitcoin often drives up the stock price of Strategy. This allows the company to raise more funds through equity issuance. These funds are then reinvested into Bitcoin purchases, creating a self-reinforcing cycle.

This model has inspired many other companies to adopt similar capital management strategies. In 2025, various companies, from liquor brands to sunscreen manufacturers, have packaged themselves with the selling point of “holding cryptocurrency assets,” trying to replicate the success of Strategy. However, most imitators lack the execution and market timing of Strategy, resulting in declining valuations and investor skepticism.

The operational logic of the self-reinforcing cycle is as follows: When the price of Bitcoin rises, the market value of the Bitcoin reserves of the Strategy increases, and the financial report shows high profits, leading to a rise in stock prices. The increase in stock prices allows the Strategy to issue new shares at a premium. Assuming the ratio of stock market value to Bitcoin holdings market value is 2, the Strategy can purchase Bitcoin worth 200 million dollars with new shares worth 100 million dollars, and each dilution actually increases the Bitcoin content per share. This paradox of “dilution means appreciation” is the most exquisite aspect of the Strategy model.

This cycle also carries risks. If the price of Bitcoin continues to decline in the long term, the financial reports of Strategy will show losses, and the stock price may fall below the actual value of its Bitcoin holdings, making equity financing uneconomical. At this point, Strategy may be forced to sell Bitcoin or resort to debt financing, which would increase financial leverage risks. Therefore, this model is highly dependent on the long-term upward trend of Bitcoin.

Annual Guidance and Stock Price Performance Divergence

Strategy reiterated the full-year performance guidance for 2025. The company expects operating revenue to reach 34 billion USD, with Bitcoin revenues reaching 20 billion USD. Saylor emphasized that the company will steadfastly execute its strategy, with no plans to hedge its Bitcoin position. “Saylor has turned a publicly traded company into a treasury for the new era. Most CEOs are pursuing recognition for quarterly performance, while he is building a parallel reserve system. Each financial report is less of a profit report and more of a fulfillment of prophecy.”

A revenue target of 34 billion USD indicates that Strategy's original software business is still operational, although its significance has significantly decreased. The 20 billion USD Bitcoin revenue is the core highlight, based on the assumption that Bitcoin will reach or exceed the current price level by the end of the year. With the current unrealized gains of 21.6 billion USD, achieving the 20 billion USD target is basically assured.

Despite Bitcoin's strong performance and excellent profitability, the stock price of Strategy has fallen by about 12% from 2025 to the present. In contrast, Bitcoin has risen by 14.5% during the same period. This difference suggests that the market may be digesting concerns about valuation, equity dilution due to capital increases, or regulatory uncertainty. Strategy's stock typically trades at a high premium, with its market value often being 2 to 3 times the value of its Bitcoin holdings. When this premium narrows, the stock price may decline even if Bitcoin rises.

However, after the financial report was released, the stock price rose nearly 4% in after-hours trading. This positive reaction indicates that investors continue to have a strong interest in the company's Bitcoin reserve model. The market is digesting the shocking figure of $2.8 billion in quarterly profits and reassessing the valuation of Strategy.

Revolutionary Impact on Corporate Financial Management

Strategy, thanks to the success of its Bitcoin reserve strategy, has broader implications for corporate financing. U.S. President Trump’s attention to the digital asset space and his commitment to making the U.S. a global cryptocurrency hub have created a favorable regulatory environment. Strong ETF inflows have helped Bitcoin set multiple historical highs in 2025. These macro factors provide an ideal market environment for the Bitcoin reserve model.

The company's model demonstrates how enterprises can use Bitcoin as a treasury reserve asset. This is in stark contrast to traditional cash management strategies that rely on short-term securities and bonds. As Bitcoin gradually gains acceptance as an asset class among institutions, more companies may consider adopting similar treasury strategies in the future. The quarterly performance of the Strategy continues to validate the concept of Bitcoin financial companies. This model disrupts traditional corporate financial management concepts and creates a new framework for valuing companies with significant cryptocurrency holdings.