Investors Scared by Losses Drop Lawsuit Against Strategy
Bitcoin treasury firm Strategy has been lucky to avoid being sued by disgruntled investors for $5.9 billion in damages.
In its Q1 2025 financial report, Strategy employees were forced to admit that the firm had an unrealized loss of $5.9 billion due to its investments in BTC, which fell more than 11% during the reporting period. Apparently, this fact scared the company's shareholders, and in May they filed a lawsuit in federal court in the US state of Virginia, accusing the firm and its directors of providing false information about its cryptocurrency investment strategy, which led to an underestimation of the risk associated with the high level of volatility of the Bitcoin exchange rate.
However, the downward trend in the BTC market was temporary, and the bullish rally resumed. Thanks to this, on August 14, the digital asset’s rate updated its historical maximum at $124,517, and Strategy’s profit from investments in BTC reached 53%. Moreover, the company took advantage of the recent dump to buy the cryptocurrency twice.
Bitcoin price change (yellow line) and moments of coin acquisition by Strategy (yellow circles)
Seeing that Strategy's management plan was bearing fruit, investors withdrew the lawsuit without formally explaining their decision. Thus, the storm clouds gathering over Strategy have dispersed. However, it cannot be ruled out that similar lawsuits will be filed against the firm in the event of a prolonged bearish trend in the BTC market, which will lead to losses for the institution at least on paper.
Source: cryptonews.net
