Strategy reported a substantial net profit in its latest quarter, propelled by the appreciation of Bitcoin and a significant shift in its accounting policy for digital assets.
The company posted a net profit of $2.78 billion for the three months ending September 30. This marked a sharp turnaround from a net loss of $340.2 million in the same period a year earlier.
This financial rebound led to earnings of $8.42 per share, compared to a loss of $1.72 per share previously. Following the announcement, Strategy’s shares rose nearly 4% after market close.
The impressive quarterly performance was directly linked to the rising value of Bitcoin, which Strategy holds as a treasury asset. As of October 26, Strategy held 640,808 Bitcoins.
These holdings were acquired at a total cost of $47.44 billion, representing an average cost of $74,032 per Bitcoin. At the time of the report, Bitcoin was trading at approximately $107,833.
A crucial factor in reporting these gains was a change in Strategy’s accounting treatment, which now allows the company to reflect unrealized gains from Bitcoin’s price increases in its financial statements.
Previously, until the fourth quarter of 2024, Strategy could only record impairment losses when Bitcoin’s price dropped below its cost basis. Gains were not recognized until the assets were sold.
This accounting policy adjustment was decisive for the quarter’s positive outcome, enabling the revaluation of its digital assets to be reflected directly in its reported earnings.
Several analysts and other companies have reportedly adopted similar accounting approaches, indicating a broader trend in how digital asset holdings are managed and reported.
The overall optimism in the cryptocurrency sector, according to Reuters, was boosted by a pro-digital asset stance from the U.S. administration. The administration has aimed to position the United States as a global hub for cryptocurrencies.
Furthermore, substantial inflows into Bitcoin-related exchange-traded funds (ETFs) in 2025 helped the digital asset achieve new records. This institutional capital flow provided strong support for demand and pricing.
Despite these positive developments, Strategy’s stock has declined approximately 12% year-to-date in 2025. This contrasts with Bitcoin’s own gain of 14.5% over the same period, suggesting other market factors or investor expectations are influencing the company’s valuation.
While Bitcoin’s appreciation has significantly improved Strategy’s financials, its model remains exposed to volatility. Sharp fluctuations in the cryptocurrency’s price could quickly reverse these unrealized gains.
This report was sourced by Reuters, with reporting from Pritam Biswas in Bengaluru and editing by Shilpi Majumdar.