Risk assets have entered 2026 with renewed momentum, but questions remain over whether the crypto market has truly turned a corner or is merely staging a short-lived rebound.
At the center of this debate is Strategy (MSTR). The stock has started the year with a 3.43% gain, tracking Bitcoin’s latest move higher. Yet the backdrop is far from reassuring.
MSTR is heading into its fourth-quarter earnings with expectations of a multi-billion-dollar loss after Bitcoin’s 24% decline erased roughly $2.8 billion in profits booked in the third quarter. The stock dropped 48% in 2025 and now trades about 70% below its November 2024 peak, amplifying investor anxiety.
Analysts are forecasting full-year operating results in a wide range, from a loss of $7 billion to a profit of $9.5 billion. With Bitcoin ending the year near $87,600, projections are skewing toward the lower end of that spectrum. The company’s heavy exposure to Bitcoin continues to drive both its upside and downside.
This has revived doubts about the durability of MSTR’s Bitcoin-centric strategy and raised a broader question for the market: Could a disappointing Q4 report trigger Bitcoin’s first major flash crash of 2026?
The concern is not without precedent. In October, a sharp downturn in Bitcoin followed what appeared to be a well-timed exit by institutional investors ahead of MSCI’s review of MSTR’s eligibility for index inclusion, given its treasury of more than 671,000 BTC. That episode underscored how quickly sentiment can shift when index or allocation risks surface.
Now, with Q4 performance effectively locked in, investors are bracing for another potential jolt. MSTR shares have just recorded their first six-month losing streak since the company adopted its Bitcoin strategy in 2020, amounting to a cumulative 134% loss over that span.
These technical losses are expected to be reflected more clearly in the upcoming Q4 report, which could intensify scrutiny of the company’s reliance on Bitcoin and its ability to withstand extended drawdowns in the crypto market.
Market participants are preparing for elevated volatility around the earnings release. Bitcoin remains roughly 25% below its pre-October crash highs, and caution continues to dominate positioning. Against that backdrop, another flash-crash-style move in early 2026 cannot be ruled out.
Key takeaways:
- MSTR is expected to report a multi-billion-dollar Q4 loss after Bitcoin’s pullback erased earlier gains.
- The stock is down 48% over 2025 and sits about 70% below its November 2024 peak.
- Analysts see full-year operating results ranging from a $7 billion loss to a $9.5 billion profit, with outcomes likely toward the lower end.
- Bitcoin is about 25% below pre-October crash levels, and another bout of sharp, rapid selling remains a risk.