Strategy Inc. announced Monday the establishment of a $1.44 billion U.S. dollar reserve to support dividend payments on its preferred stock, while significantly cutting its full-year 2025 profit and bitcoin yield targets amid sharp declines in cryptocurrency prices.
The bitcoin treasury company, led by Executive Chairman Michael Saylor, funded the reserve through sales of 8.214 million shares of Class A common stock between Nov. 17 and Nov. 30, which generated $1.478 billion in net proceeds. The company also disclosed a modest purchase of 130 bitcoins during the same period for $11.7 million, bringing its total holdings to 650,000 BTC acquired for $48.38 billion.
"Establishing a USD Reserve to complement our BTC Reserve marks the next step in our evolution, and we believe it will better position us to navigate short-term market volatility while delivering on our vision of being the world's leading issuer of Digital Credit," Saylor said in a statement.
Strategy holds approximately 3.1% of the 21 million bitcoin that will ever exist, making it the world's largest corporate holder of the cryptocurrency. President and Chief Executive Officer Phong Le noted the reserve currently covers 21 months of dividends.
What Happened
The company revised its fiscal year 2025 guidance based on an assumed year-end bitcoin price range of $85,000 to $110,000, down sharply from its previous assumption of $150,000 published in October. Bitcoin traded around $86,000 on Monday morning, extending a decline that has seen the cryptocurrency fall more than 30% from its October peak.
Strategy now expects full-year operating income loss between $7 billion and $9.5 billion, and net income ranging from a loss of $5.5 billion to a gain of $6.3 billion. The updated ranges reflect the extreme sensitivity of the company's earnings to bitcoin price movements under new accounting standards that require the firm to mark its bitcoin holdings to fair value at each reporting period.
The company also cut its bitcoin yield target for the year to a range of 22% to 26%, down from its previous target of 30%. The bitcoin dollar gain target was reduced to $8.4 billion to $12.8 billion, compared with the earlier $20 billion target.
Strategy's current intention is to maintain a USD reserve sufficient to fund at least 12 months of dividends, with the goal of ultimately covering 24 months or more. The maintenance of the reserve remains at the company's sole discretion and may be adjusted based on market conditions and liquidity needs.
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Why It Matters
The establishment of the USD reserve addresses growing concerns about Strategy's ability to fund dividends on its various classes of preferred stock without selling bitcoin or further diluting common stockholders. The company has issued multiple series of preferred shares throughout 2025 as its primary financing vehicle for bitcoin purchases, after its stock price decline constrained its ability to raise capital through common share sales.
Strategy shares have fallen 41% year-to-date and approximately 70% from their all-time high reached in 2024, putting pressure on the company's capital markets strategy. The stock traded down 4.4% in premarket trading Monday alongside bitcoin's overnight decline.
The company faces additional headwinds, including potential removal from major equity indices. JPMorgan analysts have warned that Strategy could see billions of dollars leave its stock if MSCI removes it from indices such as the Nasdaq-100 and MSCI World, with a decision expected in mid-January 2026. Roughly $9 billion of Strategy's $50 billion market value sits in passive funds tracking these indices.
The company expects to achieve its revised targets through preferred stock offerings and disciplined common stock issuances, along with resulting increases in its bitcoin holdings. Strategy adopted fair value accounting for its bitcoin holdings in January 2025, which means its earnings now directly reflect changes in bitcoin's market price at each reporting period.
Since adopting bitcoin as its primary treasury reserve asset in August 2020, Strategy has transformed from a business intelligence software company into what it calls the world's first Bitcoin Treasury Company, pioneering a corporate finance model that has since been emulated by other publicly traded firms.
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