Strategy Investors Drop Lawsuit Over Bitcoin Profitability Promises
Investors have dismissed a class-action lawsuit against Bitcoin company Strategy, which was accused of making false statements about its profitability. The lawsuit, filed in May, claimed Strategy misled investors regarding the effects of new crypto accounting practices on profitability. Strategy, holding over $68 billion in Bitcoin, switched to a fair value accounting standard that allowed it to reflect price fluctuations on its balance sheets. Previously, it recorded Bitcoin at purchase cost and could only mark down losses. Following a reported net loss of $4.22 billion in Q1 2025, despite a Bitcoin price surge, shareholders expressed dissatisfaction. Plaintiffs voluntarily dismissed their claims in federal court with prejudice, preventing future litigation. Additionally, Strategy faced criticism for comparing its price-to-earnings ratio to major companies like Apple and Nvidia, which was labeled as fraudulent due to its reliance on a temporary increase in Bitcoin's price rather than sustainable business fundamentals.
