In its Q1 2026 earnings report Released on Tuesday, the strategy reported a net loss of $12.54 billion, after Loss of $17.44 billion in the last quarter of 2025. The overwhelming majority of those figures include unrealistic downside related to Bitcoin’s low price. The company has never sold any of the Bitcoins it has earned; However, It seems more and more open to that last possibility. Its reserves now stand at 818,334, or about 3.9% of the entire Bitcoin supply. These holdings currently have a market cap of $64.14 billion and the price of Bitcoin is around $78,000.
Despite large unrealistic losses appearing on paper, the company that invented the corporate Bitcoin treasury model used the earnings release to highlight the performance of its digital credit instrument called Stretch, or STRC. The Stretch Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock is. Investors buy shares of this preferred equity product, and the company puts the proceeds directly into Bitcoin purchases. Holders receive a variable-rate dividend backed by the firm’s Bitcoin holdings, which the company and its backers expect to grow substantially over time. The tool has attracted $5.58 billion so far and more than $8 billion in the nine months since it originally launched.
To put it more simply, the strategy is basically borrowing money at 11% per year (at current rates) and using it to buy Bitcoin because they think the price of the crypto asset will increase by more than 11% per year. The company is effectively a leveraged play on Bitcoin. As noted, previous funding mechanisms involved very low costs of borrowed capital.
“Strategy is the leading issuer of digital credit in the world, with over $13.5 billion of preferred equity outstanding, supported by a strong Bitcoin balance sheet,” said Strategy CFO Andrew Kang. “We continue to expand our track record of serving our dividends, now exceeding $693 million, while meeting our payment obligations on time and in full over 23 consecutive distributions since the launch of our preferred equity products in early 2025.”
While unrealized losses have been scrutinized, the strategy maintains its focus on increasing Bitcoin holdings per share rather than chasing dollar-denominated quarterly profits. The company measures success through metrics like BTC yield, which reached 9.4% in the first four months of 2026, and it added approximately 63,410 Bitcoins to its coffers during that period. Officials believe Bitcoin will continue to expand its role A global, depoliticized reserve asset And so increases in value over time.
strategy ceo @fongley refuted my claim $STRC Arguing that it is a Ponzi scheme, it is “transparent” and “what we are doing is very clear.” But I never accused the strategy of hiding the plan. On the contrary, I have called STRC the most obvious Ponzi. $mstr Very open about it.
– Peter Schiff (@PeterSchiff) 3 May 2026
It is not hard to find critics of the overall approach to strategy, and Some people call it a complete Ponzi scheme. Peter Schiff, veteran gold advocate and Bitcoin skeptic who heads Euro Pacific Capital Predicted housing crisis of 2008Is called The strategy’s STRC product was described as “the most obvious Ponzi scheme.” He also said that just because a company is completely transparent about what it is doing does not mean it is not a Ponzi scheme.
The strategy has also been compared to investment trusts. which gained popularity during the stock market boom of the 1920s and ultimately contributed to the crash of 1929. Those vehicles generated enough leverage to weigh on shares of emerging technology companies. This analogy has come up frequently since the release of Andrew Ross Sorkin’s recent book 1929, which details the events of that accident. That said, Sorkin himself has avoided claiming that the strategy faces similarly disastrous consequences.
Whether the model will hold up to the next crypto cycle or collapse in a Ponzi-esque manner remains an open question, but for now investors keep supplying capital allowing the strategy to continue adding to its Bitcoin reserves.
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