Strategy Reports $8.6 Billion Quarterly Loss Driven by Bitcoin Unrealized Loss

Bitcoin's sharpest rally in two years was driven almost entirely by short liquidations rather than fresh bullish buying, according to a new report from analytics firm Glassnode and crypto exchange Bybit. Over five days in August, Bitcoin climbed 24.6% even as coin-denominated open interest, a measure of active leverage, fell 12.6%, with roughly 64,000 BTC worth of open interest closed out and short positions supplying 89% of every liquidated dollar during the stretch. The options market confirmed the pattern: puts had priced richer than calls for 361 straight days before a single session ended that run, while Bybit's volatility index traveled four times its normal daily range and the front of the futures curve repriced sharply as longer-dated contracts barely moved. The report, with data as of the settled close of August 23, draws on Glassnode's coverage of four crypto-native options venues and excludes CME, so its figures describe the crypto-native market rather than every venue where Bitcoin trades. The dynamic has persisted: Bitcoin blasted back above $80,000 this week after the Federal Reserve paired its first rate hike since 2023 with a dovish forecast, triggering another squeeze that liquidated more than $230 million in Bitcoin shorts and over $445 million across the market in a single session, with CoinGlass data showing roughly $529 million in total liquidations over 24 hours, again mostly from shorts. The report's authors flagged the open question their data raises, namely whether August's repricing sticks, noting that a durable shift would show up as skew holding call-bid and the front of the curve staying firm, while a return of put premium alongside fading funding would mark it as an event the market absorbed rather than a new regime it entered.

Analysts at JPMorgan Chase said Bitcoin could receive stronger price support than gold if hedging activity tied to exchange-traded funds declines. According to the bank, gold ETFs have already recovered the outflows seen since the start of 2026, while Bitcoin ETFs have recouped only about half of their outflows, and demand for Bitcoin ETFs has weakened recently, meaning Bitcoin has more room to recover than gold if conditions improve. Behind this is renewed attention on currency debasement trades after the Federal Reserve's meeting in late July, but that trade has lost momentum over the past week, weighed down by rising real interest rates and the lack of progress in the U.S. Senate on the crypto market structure bill known as the Clarity Act. Short interest in the ETFs differs sharply: short interest in BlackRock's spot Bitcoin ETF, the iShares Bitcoin Trust ETF, is near its highest level of 2026, while short interest in the gold ETF SPDR Gold Shares is below its historical average. For IBIT, the ratio of put option open interest to call option open interest is also higher than for GLD, and JPMorgan analysts concluded that under the current market structure, where IBIT has more short interest than GLD, an unwind of positions could support Bitcoin more than gold if hedging demand declines.

Bitcoin rallied to a two-week high on Friday, climbing back above the psychologically important $80,000 level, with the broader crypto market joining the advance. According to Bitget Wallet research analyst Lacie Zhang, US spot ETF inflows and short covering helped push it through the psychologically important $80,000 level. The surge came despite a Fed rate hike earlier in the week and the failure of the Clarity Act, legislation that would have created a federal framework for the broader digital asset industry; after the measure failed to advance in the Senate, the Securities and Exchange Commission stepped in on Thursday with a conditional exemption allowing the trading of certain tokenized stocks on blockchains for the next five years. While bitcoin led the move, ether, binance and solana have outperformed over the past month, gaining 35%, 25% and 41% respectively, and rotation into alternative tokens and tokenized versions of Nvidia, Tesla and the S&P 500 helped lift the total crypto market capitalization to $2.66 trillion, according to CoinMarketCap. Fundstrat's Sean Farrell said crypto has absorbed a fairly aggressive hawkish repricing without much damage, while Compass Point's Ed Engel last week upgraded Coinbase to Neutral from Sell, citing that BTC is recovering from a cyclical bottom.