The "never sell" pledge faced its toughest reality check in the first quarter of 2026.
On May 5, 2026, Strategy (formerly MicroStrategy), the public company holding the most Bitcoin worldwide, released a first-quarter earnings report that shocked the market: a net loss of $12.54 billion for the quarter, or $38.25 per share—far exceeding Wall Street’s prior estimate of $3.41 per share. This figure even surpasses the annual revenue of most large corporations, but within Strategy’s financial framework, it’s merely a "non-cash accounting entry."
The loss itself wasn’t unexpected—the real shock came from a statement by Strategy’s Executive Chairman Michael Saylor during the earnings call: "We may sell some Bitcoin to pay dividends—just to instill confidence in the market and send a message: we did it."
A company that spent five years reinforcing its "never sell" mantra is now dismantling its own narrative pillar. This marks not only a strategic shift for Strategy, but also a pivotal moment signaling the fragmentation of the corporate Bitcoin-holding ecosystem.
An Earnings Report That Forces a Reassessment of "Hold Faith"
Strategy’s first-quarter revenue reached $124.3 million, a slight year-over-year increase, but with operating income at this scale, the market’s focus has long since shifted away from the software business itself. The core shock in the earnings report stemmed from the fair value revaluation of digital assets: due to the Bitcoin price dropping sharply from around $87,000 to $68,000 during the quarter, Strategy booked $14.46 billion in unrealized losses, resulting in an operating loss of $14.47 billion and a net loss of $12.54 billion for the period.
It’s important to clarify that this is a "non-cash" loss—Strategy did not actually sell Bitcoin to realize the loss. However, under the new FASB (Financial Accounting Standards Board) rule ASU 2023-08, effective from 2025, companies must measure crypto assets at fair value, with price fluctuations reflected in real time on the income statement. In other words, the new accounting standard moves previously hidden unrealized gains and losses from the footnotes directly onto the most visible part of the profit and loss statement.
Another set of data in the report highlights Strategy’s continued accumulation. As of May 3, 2026, Strategy held 818,334 BTC, representing about 3.9% of total Bitcoin supply, with a net increase of approximately 89,600 BTC for the quarter—a 22% year-over-year rise in holdings. Despite the downturn in Bitcoin prices, Strategy kept buying, but simultaneously released an unprecedented signal: selling is now a tool in its arsenal.
From "Never Sell" to "Conditional Selling": Five Key Evolution Steps
Strategy didn’t change its stance overnight. From its initial adoption of Bitcoin as a corporate reserve in 2020 to publicly discussing the possibility of selling in 2026, its narrative passed through five critical milestones.
| Timeline | Key Event | Role in Narrative Structure |
|---|---|---|
| August 2020 | Strategy announced Bitcoin as its primary reserve asset, ushering in the institutional "corporate Bitcoin holding" paradigm | Narrative starting point |
| December 2022 | Strategy sold about 704 BTC for tax optimization, but immediately declared "still firmly holding" | First sell signal, downplayed |
| Q2 2025 | FASB’s new ASU 2023-08 takes effect, Bitcoin measured at fair value, unrealized gains and losses flow directly to P&L | Fundamental shift in regulatory environment |
| December 2025 | Strategy established a $1.44 billion dividend reserve, preparing for preferred stock payouts | Early sign of capital pressure |
| May 5, 2026 | Q1 loss of $12.54 billion, Saylor publicly states possible Bitcoin sales to pay dividends | Formal strategic pivot |
The core logic of this timeline is that changes in the regulatory environment (new accounting standards) combined with structural constraints on financing tools (high-yield preferred stock) forced Strategy to evolve from a static holder ("only buy, never sell") to an institution that actively manages its asset portfolio.
Data and Structural Analysis: Who’s Profitable, Who’s Underwater?
To understand the corporate Bitcoin landscape in Q1 2026, we need to look beyond Strategy and examine both macro and micro perspectives.
Macro View: The Collective Rise and Fall of 1.15 Million BTC
According to Bitwise data, by the end of Q1 2026, 187 public companies globally held about 1.15 million BTC, accounting for 5.47% of Bitcoin’s fixed supply of 21 million coins, with a total market value of roughly $77 billion. Public companies added a net 50,351 BTC during the quarter, showing that the overall accumulation trend continues.
However, while holdings increased, prices shrank. At quarter’s end, Bitcoin traded at about $67,805—an 18.96% drop in portfolio value from the previous quarter. More notably, on-chain data estimates that as of March 2026, about 77% of corporate Bitcoin holdings were "underwater"—meaning their current market value was below original purchase cost. Most of these holdings were acquired by companies during Bitcoin’s price peak in 2025 ($85,000–$98,000 range).
Micro Divergence: The Extremes of Accumulators and Sellers
In the same quarter, corporate strategies diverged sharply.
Continued Accumulators:
Strategy bought approximately 89,600 BTC for about $7.3 billion, with an average purchase price around $80,900 per coin. Some sources show the total quarterly acquisition cost at $5.5 billion (including secondary market operations), but regardless of calculation, the buying intensity was historically high. Strategy’s holdings reached 818,334 BTC, accounting for roughly 66% of all Bitcoin held by public companies.
Metaplanet continued aggressive expansion in Japan, spending about $405 million to buy 5,075 BTC at an average price of $79,898 per coin, raising its total holdings to 40,177 BTC—surpassing MARA Holdings to become the world’s third-largest corporate Bitcoin holder. The company announced a goal to hold 100,000 BTC by the end of 2026 and expand to 210,000 BTC by the end of 2027, issuing ¥8 billion (about $50 million) in zero-coupon bonds to fund further accumulation.
GameStop took a third approach. It didn’t sell its 4,710 BTC, but pledged 4,709 BTC to Coinbase as collateral, executing a covered call strategy—selling short-term call options with strike prices between $105,000 and $110,000 to earn option premiums. This means GameStop didn’t sell Bitcoin, but is betting it won’t surge past the upper limit in the short term, trading upside for cash flow.
Significant Sellers:
Mining companies led the selling. MARA Holdings sold about 15,133 BTC in March for roughly $1.1 billion to repurchase debt and adjust strategy, reducing its holdings from 53,822 to 38,689 BTC. Riot Platforms sold 3,778 BTC for about $289.5 million in Q1. Bitdeer liquidated all its Bitcoin reserves in February—including self-held and current mining output—to fund AI data center construction. CleanSpark sold 97% of its monthly Bitcoin production, and Core Scientific cashed out 1,900 BTC.
Additionally, Cango Inc. sold 4,451 BTC (about 60% of its holdings) to repay Bitcoin-backed loans. Trump Media & Technology Group (TMTG) recorded a net loss of about $405.9 million in Q1 due to unrealized crypto asset losses.
As of May 12, 2026, Bitcoin was priced at $81,245.6, up about 30% from the Q1 low of $62,501.0, but still down roughly 35.6% from the previous year’s high of $126,193.0. At this price, Strategy’s holdings were valued at about $66.54 billion, with an average cost of $61.81 billion—leaving about $4.73 billion in unrealized gains. This adds a dynamic variable to the "profit or underwater" equation. Metaplanet, however, faces a different scenario: with an average holding cost of $104,106 per coin, even at the current $81,245.6, it remains deeply underwater.
Structural Impact of Accounting Rules: A Balance Sheet Under the Microscope
To understand why corporate Bitcoin strategies diverged so dramatically in 2026, we must examine the FASB accounting rule ASU 2023-08, effective June 2025.
Previously, Bitcoin was classified as an "intangible asset" under an asymmetric measurement model—only impairment losses were recognized when prices fell, with no reversal allowed, and gains weren’t recognized when prices rose. This accounting regime effectively undervalued corporate Bitcoin holdings, but also shielded profit statements from short-term price volatility.
With the new rule, Bitcoin is measured at fair value, and price changes are reflected directly in each reporting period’s income statement. This means: when Bitcoin rises, companies show "fair value gains" on their P&L; when it falls, "fair value losses" hit net income just as directly.
Strategy’s $14.46 billion write-down in Q1 is a direct result of this regulatory shift amid a bear market. Experts note that the new accounting standard will make public company financials holding Bitcoin more "volatile," and investors must learn to distinguish between "cash profits/losses" and "mark-to-market revaluations."
This raises a deeper question: Is the change in accounting standards fundamentally reshaping corporate Bitcoin logic? With the income statement no longer providing a "buffer layer," the cost of holding Bitcoin—not just capital, but also disclosure and management explanation costs—is systematically rising.
A "Faith Paradox" Being Repriced by the Market
Strategy’s earnings report triggered one of the most notable narrative shifts in today’s market. Polymarket prediction data shows the probability of Strategy selling Bitcoin by year-end 2026 has climbed to 86%. MSTR shares dropped about 4% in after-hours trading following the report.
But to unpack this market reaction, we need to distinguish two layers.
Layer One: Narrative Fracture in Public Discourse. Saylor’s repeated "never sell Bitcoin" statements became core to his personal brand and Strategy’s corporate narrative. Now, CEO Phong Le has quantified the trigger conditions: if the company’s stock price falls below book value, or if mNAV (market cap to Bitcoin holding value ratio) drops below about 1.22x, selling Bitcoin to pay dividends becomes more favorable to shareholders than issuing new stock. This mathematical framework replaces "faith" in the narrative—for long-time Strategy analysts, it’s a collapse of the story; for investors focused on financial logic, it actually offers greater predictability.
Layer Two: Financial Logic and Internal Consistency. The true economic meaning of "selling" should be understood calmly. Strategy needs to pay about $1.5 billion annually in STRC preferred dividends and interest. At roughly $80,000 per Bitcoin, this requires selling about 18,500 BTC per year, just 2.3% of its total 818,334 BTC holdings. Moreover, by selling portions of Bitcoin bought above current prices to realize capital losses, Strategy can unlock about $2.2 billion in deferred tax savings.
From a capital allocation perspective, this is more "arbitrage" than "liquidation." The issue is that narrative-driven market pricing often precedes rational financial assessment. An analysis of institutional Bitcoin holding challenges noted that the early 2026 price retreat exposed the model’s deep reliance on leverage and bull markets, with small and mid-sized companies lacking sustainable cash flow facing the toughest survival tests.
Conclusion
The Q1 2026 corporate Bitcoin earnings season leaves the market with a more complex evaluation framework than ever before. The seemingly simple question of "who’s profitable, who’s underwater" depends on which time snapshot you use: anchored to acquisition cost, quarter-end price, or the current price rebound?
More importantly, unrealized gains and losses are just snapshots in time. Despite massive paper losses, Strategy’s "Bitcoin per share" rose 18% year-over-year, from 181,030 sats in May 2025 to 213,371 sats. This metric pushes the return cycle further into the future—being "underwater" now is just one coordinate in a long cycle.
The future of corporate Bitcoin holdings will no longer be narrated by "faith," but determined by two fundamental variables: first, the real capital cost each company pays to hold Bitcoin; second, whether their toolkit and risk buffers are sufficient to weather price volatility at every stage. The interplay between these forces will be the ultimate measure when we look back on this "corporate Bitcoin experiment."
