Strategy (MSTR) and other corporate Bitcoin (BTC) treasuries remain under pressure as BTC’s volatile 2025 performance – marked by sharp rallies and deep corrections – has turned annual returns slightly negative. MSTR stock prices are down more than 60% from their year-ago highs, while peers raising capital through private investments in public equities (PIPEs) have also seen their stock prices fall towards their issuance levels.
Strategy: Largest BTC Corporate Holder
Michael Saylor’s Strategy, formerly known as MicroStrategy, is an American business intelligence (BI) and mobile software company that has treated BTC as its primary treasury reserve asset since August 2020.
As shown in the graph below, the firm has so far accumulated 671,268 BTC in its treasury reserves, worth $60.04 billion. average price $74,972 per BTC. This makes it the largest corporate BTC treasury company in the world, holding 21% of the total BTC supply of 3.19 million.
The company raises capital through convertible notes, preferred stock, and equity offerings in the market to purchase Bitcoin even during price declines.
In addition to these capital raising methods, the firm announced on November 30 the creation of a dedicated US dollar reserve, funded entirely through an at-the-market (ATM) issuance of new MSTR common stock.
The purpose of the reserve is clearly to cover the following:
- Cash dividends for the strategy’s preferred stock classes (approximately $700 million per year).
- Interest on its outstanding convertible bonds.
- Short-term liquidity is required when capital markets are tight.
This reserve is managed separately from the firm’s Bitcoin, making the strategy the first dual-reserve entity. As of December 22, the strategy has increased its USD reserves from $748 million to $2.19 billion, enough to cover about $700 million in annual preferred stock dividends for more than three years.
Stock Performance and Challenges in 2025
On the weekly chart the strategy’s share price has fallen sharply from a yearly high of $457.22 recorded on July 14 to a low of $155.61 recorded on December 1, a decline of more than 63%. MSTR is currently trading near $160, close to its yearly low and below its 200-week exponential moving average (EMA) at $184.09.
There are a few reasons for this improvement in MSTR price.
Bitcoin’s sharp rally reached a record high of $126,199 on October 6, before slipping below the yearly open at $93,576 and now heading towards a yearly low at $74,508, turning 2025’s performance into a slightly negative one near the end of the year. Due to MSTR’s leveraged exposure as a debt-financed Bitcoin bet, its share price fluctuated more than that of BTC, leading to significant losses for investors despite unchanged holdings.
Furthermore, the strategy finances its Bitcoin accumulation primarily through convertible debt, preferred stock, and equity offerings at market rather than by selling BTC. As a result, much of its older debt has become cheaper. However, the cost of new borrowings and preferred shares is very high, increasing annual interest and dividend payments.
Additionally, frequent share issuances dilute existing investors, so each share represents a small portion of the company and its Bitcoin holdings. Thus, in a strong but volatile 2025 marked by pronounced quarterly fluctuations in the Bitcoin market, this poses a problem for the strategy. The company can no longer easily raise capital cheaply, while higher financing costs and dilution put pressure on cash flow and put pressure on the stock price, even if Bitcoin does not decline precipitously.
Potential index-exclusion risks, such as from Morgan Stanley Capital International (MSCI), could remove companies whose balance sheets are dominated by Bitcoin (more than 50% of assets), causing them to be treated more like investment vehicles than operating companies.
If the strategy is panned out, passive funds and ETFs that track these indices will be forced to sell MSTR shares, triggering an outflow of billions. Additionally, investors are likely to reallocate capital from high-volatility assets, such as leveraged Bitcoin proxies like MSTR, toward more stable assets. This development will reduce liquidity and institutional demand, potentially causing MSTR stock prices to decline.
Strategy reflects weak NAV premium
The NAV premium metric measures how much the market values a company relative to the net value of its Bitcoin holdings and other assets, excluding liabilities. The current NAV premium reads -18.12% (0.82x), meaning the market value is 82% of the value of MSTR’s Bitcoin holdings per share (excluding other business value).
This suggests that investors are currently unwilling to pay a premium for the strategy’s leveraged Bitcoin exposure, as concerns about dilution, rising borrowing costs and Bitcoin’s sideways performance weigh on sentiment – making it harder for MSTR to raise low-cost capital for further BTC accumulation without putting pressure on shareholders.
However, during strong bull markets, this premium often ranged from 1.5x to 2.5x, allowing the strategy to raise capital cheaply and increase bitcoins per share through incremental financings.
Fiscal and broad fiscal outlook
The number of imitators of the strategy continues to grow, with more than 191 public companies holding BTC in their treasury reserves, according to data from Bitcoin Treasury.
Many of these public companies follow a strategy of debt- and equity-financed purchases, but mining companies like Marathon Digital (MARA) mix production with holdings. Other companies like MetaPlanet have global appeal as inflation hedges.
As is the case with the strategy, share prices of these companies have fallen 50-80% from their 2025 highs, and NAV premiums are shrinking as Bitcoin continues to underperform expectations. See example in the chart below.
A report from CryptoQuant highlights that Bitcoin treasury companies that raised capital via PIPE have experienced significant stock declines, with share prices often moving towards their PIPE issuance levels.
The analyst concluded that the continued Bitcoin rally is the only potential catalyst to prevent further decline in these stocks. Without this, many are set to continue their upward or downward trend in PIPE values.
What’s next for Strategy& other Bitcoin treasury companies?
Indeed, in 2025, as mentioned above, the stock prices of the strategy and most of its peers fell sharply due to Bitcoin’s volatile price action and widespread consolidation.
The CryptoQuant report noted that the strategy has made a tactical change to its Bitcoin accumulation model, as Bitcoin could experience weakness in 2026 after entering a bear market last month.
The analysis notes that the company no longer considers its Bitcoin exposure untouchable in all market conditions. This is still central to his long-term thesis. Having said that, management now acknowledges that maintaining the BTC stack requires the flexibility to protect it with cash buffers, hedging, and selective monetization in distressed scenarios.
The report concluded that MSTR appears to recognize a non-trivial likelihood of a deep or extended Bitcoin decline. The strategy’s shift from aggressive Bitcoin accumulation to a more conservative liquidity-focused Treasury approach coincides with Bitcoin’s biggest decline of 2025.
“This is such a severe decline that almost every major on-chain and technical indicator is now indicating that the market has entered a bearish phase, as seen with Cryptoquant’s Bull Score index falling to zero (the most bearish) for the first time since January 2022, when the last bear market was starting,” the CryptoQuant analyst says.
Bitcoin, Altcoins, Stablecoins FAQ
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to be used as money. This form of payment cannot be controlled by any one person, group or entity, which eliminates the need for third party involvement during financial transactions.
Altcoins are any cryptocurrency other than Bitcoin, but some people also consider Ethereum a non-altcoin because of the forking of these two cryptocurrencies. If this is true, then Litecoin is the first altcoin built from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, their value backed by the reserve of the asset it represents. To achieve this, the value of a stablecoin is pegged to a commodity or financial instrument, such as the US dollar (USD), whose supply or demand is controlled by an algorithm. The main goal of stablecoins is to provide on/off-ramps for investors looking to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value as cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of the market capitalization of Bitcoin to the total market capitalization of all cryptocurrencies. This provides a clear picture of the interest in Bitcoin among investors. High BTC dominance typically occurs before and during bullish rallies, with investors resorting to investing in relatively stable and high market capitalization cryptocurrencies like Bitcoin. A decline in BTC dominance usually means that investors are moving their capital and/or profits into altcoins in search of higher returns, which usually triggers the explosion of altcoin rallies.
