By Ateev Bhandari

July 31 (Reuters) - Strategy reported its first

profit in six quarters on Thursday, as the biggest corporate

holder of bitcoin benefited from a remarkable quarter for

cryptocurrencies.

In a watershed moment of legitimacy for the crypto industry,

U.S. President Donald Trump signed the GENIUS Act into law

earlier this month.

Industry anticipation leading up to the moment helped rally

bitcoin - the largest cryptocurrency - past $120,000 for the

first time as investors cheered Washington's long-awaited

approval on digital assets.

Strategy held 597,325 bitcoins as of June 30, at an average

cost of $70,982. Bitcoin currently trades around $116,600.

It recorded a $14 billion unrealized fair value gain on

digital assets during the quarter that saw corporations ranging

from major U.S. banks to payment firms embrace crypto.

Until the fourth quarter of 2024, the company could only

record losses when bitcoin's value fell below its purchase

price, but could not recognize price increases unless it sold

bitcoin.

The company's net profit was $9.97 billion, or $32.60 per

share, for the three months ended June 30, compared with a loss

of $102.6 million, or 57 cents per share, a year earlier.

Strategy began buying bitcoin with cash in 2020 and then

started issuing low-cost convertible bonds and stock sales to

finance its accumulation drive.

Its shares are up nearly 39% this year, eclipsing bitcoin's

25% climb, a phenomenon that has now inspired several public

companies to pivot their operations and mimic founder and

executive chairman Michael Saylor's buy-and-hold treasury

approach.

"We're in a hyper-growth, hyper-adoption phase for bitcoin

as a treasury reserve asset," said Saylor on a post-earnings

call.

A few among these companies are now also pivoting to smaller

tokens like ether, often listing via mergers with blank-check

vehicles to wrap crypto assets into equity.

Strategy's stock nearly fivefold last year, helping it

secure a spot in the Nasdaq 100 index in December.