Bitcoin naysayers say Strategy is taking part in ‘financial gibberish’

Michael Saylor’s crypto-centric company, Strategy, is projected to report an unrealized gain of approximately $14 billion for the second quarter of 2025, credit given almost entirely to a 30% surge in Bitcoin prices.

Much different from corporations like Amazon and JPMorgan Chase, which generate billions through traditional operations, Strategy’s anticipated earnings result primarily from digital asset exposure.

According to a Tuesday report from Bloomberg, the company could bring in just $112.8 million in revenue from its legacy software business during Q2 2025.

Bitcoin price rally fuels earnings surge

The projected profit for the quarter ending June 30 is largely attributed to Bitcoin’s rise, which saw prices increase from about $82,444 at the end of March to more than $106,000 by late June.

At the beginning of the quarter, Strategy held 528,185 BTC, translating to over $43.5 billion in value. When Bitcoin appreciated, the market value of those holdings rose by more than $13 billion. A series of smaller weekly Bitcoin purchases during the quarter added an additional $600 million to unrealized gains, Bloomberg calculations show.

On June 30, the company disclosed a major purchase of 4,980 BTC for approximately $531.9 million, at an average price of $106,801 per Bitcoin. These purchases were funded through proceeds from the sale of MSTR Class A shares and preferred equity vehicles STRK and STRF.

The latest purchase brings Strategy’s total Bitcoin holdings to 597,325 BTC, acquired for $4.40 billion at an average price of $70,982. At current market rates, the company’s unrealized gains total nearly $21.8 billion, with the portfolio now valued at $64.3 billion.

Strategy software and crypto business flourish

Over the last five years, Michael Saylor has moved Strategy from a business intelligence software firm towards a highly leveraged proxy for Bitcoin investments. His BTC accumulation methodology includes stock and debt issuance, convertible notes, and, most recently, preferred share sales.

According to Bloomberg analysts, the first quarter of 2025 was a turning point for the company when it implemented a new accounting rule requiring Bitcoin to be valued at market prices.

Under the previous system, Bitcoin was treated as an intangible asset, forcing companies to record impairment losses when prices fell, while unrealized gains were not recognized unless the asset was sold.

The change allowed Strategy to record Bitcoin’s quarterly volatility in its earnings. It had counted a $4.2 billion loss in Q1 when Bitcoin declined by 12%, but the current quarter is expected to reverse that with an exponential profit.

Bitcoin naysayers say Strategy is taking part in ‘financial gibberish’

According to short-seller Jim Chanos, investors should short Strategy stock for buying Bitcoin directly, arguing that the premium on the company’s shares compared to its crypto holdings is unjustified. Speaking in an interview late June, he said Saylor’s valuation model is “nothing more than financial gibberish.”

Since Saylor initiated the Bitcoin strategy in mid-2020, when the firm was still called MicroStrategy, its share price has surged more than 3,300%. Over the same period, Bitcoin has gained roughly 1,000%, and the S&P 500 has seen an uptick of around 115%. In the second quarter alone, Strategy’s shares rose 40%, compared to an 11% gain in the broader S&P index.

Following the Q1 loss, multiple class-action lawsuits have been filed against Strategy, alleging that executives misled shareholders. In a recent SEC filing, the company said it plans to “vigorously defend against these claims.”

Saylor’s playbook has inspired several companies, including Sharplink Gaming Inc. and BitMine Immersion Technologies, which have both begun accumulating other cryptos like Ether and Solana, seeking to replicate Strategy’s crypto-treasury model.