Strategy cautioned about potential profitability challenges after incurring substantial impairment losses on its Bitcoin holdings. This warning follows a reported net loss of $1.79 billion for the fiscal year ending December 31, 2024.

The company’s adoption of FASB’s new fair-value accounting rules may require recognizing Bitcoin’s fair value fluctuations in net income. This could significantly affect retained earnings and expose the company to corporate alternative minimum tax under the Inflation Reduction Act.

Currently, Strategy’s Bitcoin holdings total approximately 478,740 BTC, valued over $46 billion. The firm holds more than 2.2% of the total Bitcoin supply, confirming its substantial position in the cryptocurrency market.