Bitcoin-Focused Corporate Strategies Come Under Fire as Strategy Inc. Leads Market Declines

May 23, 2025 — Several prominent crypto-linked firms saw their stock prices plunge on Thursday, with Strategy Inc. (formerly known as MicroStrategy) leading the downturn. The company, well-known for its aggressive Bitcoin accumulation strategy, saw its shares fall more than 6%, a sharper drop than Bitcoin itself, which declined by 2.5% to around $108,900.

The sell-off reflects growing skepticism among investors about the sustainability of corporate strategies that heavily rely on Bitcoin holdings as a treasury reserve asset. Strategy Inc., which has famously accumulated over 214,000 BTC as of earlier this year, is increasingly viewed as a proxy for Bitcoin by equity investors. However, recent financial disclosures and market volatility are testing that narrative.

Other companies with significant Bitcoin exposure also took a hit. Semler Scientific (SMLR), which recently adopted Bitcoin as its primary treasury asset, slid roughly 6% on the day. Japan’s Metaplanet Inc., a smaller firm that has similarly aligned its corporate reserves with Bitcoin, saw an even more dramatic drop of 24%. The sharp declines raise questions about whether Bitcoin-centric financial strategies are viable in the long term, especially when markets turn sour.

The pressure comes just weeks after Strategy Inc. revealed a staggering $5.9 billion unrealized loss in its first-quarter earnings, due in large part to changes in U.S. accounting rules. New fair value accounting standards require companies to mark the current market value of their digital assets to market, including any unrealized losses or gains. This move has increased volatility in reported earnings for firms holding large crypto reserves and has added further scrutiny to their balance sheet resilience.

Despite the losses, Strategy Inc. has not taken any action to reduce its Bitcoin holdings nor sold additional stock since the end of the quarter. This continued commitment to a Bitcoin-heavy treasury strategy has drawn both criticism and admiration within the financial world. Bulls see it as a visionary play on digital assets, while critics argue that it exposes the company to unnecessary financial risk.

The broader cryptocurrency market echoed the somber tone, with major altcoins also recording notable losses. Ethereum (ETH) dropped by nearly 4% to $2,562.91, XRP slipped 3.08% to $2.36, Cardano (ADA) was down 3.29% at $0.7789, and Dogecoin (DOGE) fell 3.24% to $0.2355. These across-the-board declines suggest that the market remains fragile and reactive to macroeconomic uncertainty and regulatory developments.

Investor sentiment appears to be shifting from speculative optimism to cautious reevaluation, especially for publicly traded firms that have tethered their financial identities to Bitcoin. With regulatory landscapes evolving and digital asset markets still highly volatile, companies embracing Bitcoin as a treasury asset may face increasing pressure to diversify or justify their strategic choices.

As traditional financial analysts continue to assess the impact of crypto-related accounting standards, the latest sell-off could serve as a litmus test for the long-term credibility and resilience of corporate Bitcoin strategies.

Is the sharp market reaction to companies like Strategy Inc. a sign of deeper skepticism about Bitcoin’s future, or just short-term investor overreaction?