MicroStrategy posted a staggering $12.5 billion impairment loss in its Q1 2026 earnings, triggered by Bitcoin's 23.8% quarterly decline. The magnitude of the write-down caught markets off guard and prompted an unusual shift in Chairman Michael Saylor's long-standing rhetoric on the company's Bitcoin holdings.
Saylor Opens Door to Selling BTC: From 'Never Sell' to 'Maybe'
During the Q1 earnings call, Saylor signaled the company may depart from its rigid 'never sell' Bitcoin strategy. "We might sell a portion of our Bitcoin to provide liquidity for dividends," he said, arguing the move could "immunize the market and send a clear message." This marks a reversal from his CNBC interview in February, where he claimed MicroStrategy could service debts even if Bitcoin fell to $8,000 without liquidating any coins. Saylor stressed that both the firm and Bitcoin remain resilient, adding "the sector is robust and there is no threat to global stability."
818,334 BTC Held via Stretch Perpetual Preferred Stock
As of quarter-end, MicroStrategy held 818,334 Bitcoin, worth approximately $66.7 billion. The bulk of this year's additions (145,834 BTC) were funded by issuing a perpetual preferred stock called Stretch (STRC), which pays dividends. Saylor aims for Stretch to become the world's largest credit instrument, with rising assets under management expected to drive liquidity and adoption.
Bitcoin-Backed Financial Products Gain Traction
DeFi protocols like Pendle and Saturn have launched tokenized versions of Stretch's 11% monthly dividend, increasing liquidity and access. Saylor noted nearly three dozen neobank-style initiatives offering Bitcoin-collateralized digital yield accounts have emerged in the past two to three months. These products can yield up to 8%, surpassing most stablecoins. Saylor expressed optimism that the Bitcoin lending market will see "even more exciting developments" in the coming quarter.
After the earnings release, MicroStrategy shares slid 4.33% in after-hours trading to $178.80. Bitcoin has since rebounded nearly 20% from April 1 to $81,250, setting up a potentially stronger Q2 for the company.