Strategy (NASDAQ: MSTR) stock dipped over 2% after reporting fourth-quarter earnings heavily impacted by Bitcoin accounting, not software operations. Analysts expected EPS of $46.02 but posted a loss of $42.93 due to Bitcoin losses. Strategy’s focus has shifted to Bitcoin treasury, with 713,502 Bitcoin owned at an average cost of $76,052 per Bitcoin.

Strategy financed its Bitcoin purchases with convertible debt, making it a leveraged play on Bitcoin. With Bitcoin trading 16% below Strategy’s purchase price, investors face liquidation risk. While its software business remains, Strategy’s valuation is tied to Bitcoin. The possibility of Bitcoin sales looms, with odds standing at 26%.

Investing in Strategy means investing in Bitcoin, with leveraged bets on its price movements. MSTR stock has fallen nearly 58% in the last three months as Bitcoin prices dropped. Analysts target a 290% gain, but the reality of Bitcoin’s selloff poses an asymmetric risk. Holding for Bitcoin’s recovery could offer a buying opportunity.

Read more at Nasdaq.: Strategy Earnings Reveal the Real Risk Behind MSTR Stock