Strategy stock price has been in freefall for nearly a year. After peaking at $543 on November 21, 2024, the share price has collapsed to around $220, representing a staggering 60% decline.
Bitcoin, in contrast, has held up relatively well — but Strategy has massively underperformed BTC.
A Break in the Correlation
For years, Strategy traded almost in lockstep with Bitcoin. But in recent months, that correlation has cracked:
- •Strategy shares dropped sharply
- •Bitcoin stayed relatively stable
- •Strategy’s performance fell dramatically behind BTC
This divergence has now created an unprecedented situation:
Strategy’s market capitalization is now lower than the value of the Bitcoin it holds.
Current numbers:
- •Market Cap: ~$63.5 billion
- •Bitcoin Holdings: 641,692 BTC
- •BTC Value: ~$65.5 billion
Meaning: The market values the entire company at less than its Bitcoin balance.
Why mNAV Still Sits Above 1.0 — And Why It Matters
The most important metric for Bitcoin treasury companies is the multiple Net Asset Value (mNAV).
mNAV = Enterprise Value ÷ Bitcoin Holdings Value
To calculate Enterprise Value, liabilities must be included:
- •Market Cap: ~$63.5B
- •Convertible Notes: ~$8.25B
- •Preferred Shares: ~$6.75B
Enterprise Value: ~$78.5B
mNAV: ~1.2×
So, despite the falling share price, Strategy still trades slightly above its Bitcoin-adjusted valuation once debts are included.
Why Strategy Is Struggling: Slowing BTC Purchases and Heavy Obligations
Slower Bitcoin Accumulation
Strategy has drastically reduced its BTC purchases:
- •Past 12 months: >400,000 BTC acquired
- •Since August 11: Only 12,746 BTC purchased
This slowdown signals increasing difficulty raising capital.
Dependence on Preferred Shares
To keep accumulating Bitcoin, Strategy turned heavily to preferred shares, which require dividend payments.
So far in 2025:
- •Capital raised via preferred shares: ~$6B
- •New Europe-focused STRE issuance: ~$700M
- •Annual dividend obligations: >$700M
To pay these dividends, Strategy must often issue new common shares, which causes shareholder dilution — especially problematic when share prices are low.
Why the mNAV Problem Can Get Worse
A persistently low valuation creates a dangerous loop:
🔹 Lower share price = more dilution: Strategy must issue more shares to raise the same amount of capital.
🔹 Higher obligations = higher dilution pressure: Dividends and interest obligations continue rising.
🔹 Rising leverage = higher risk: If Strategy cannot issue shares efficiently, buying more BTC requires higher leverage — increasing risk.
🔹 Convertible debt deadlines approaching: More than $8B in convertible notes start coming due in 2028.
If the stock price is too low to convert debt into shares, Strategy may be forced to raise cash, refinance, or, in the worst case, liquidate assets.
Could Strategy Be Forced to Sell Bitcoin?
Not necessarily.
Strategy survived the 2022 bear market, during which:
- •mNAV fell below 1.0
- •The balance sheet was far more fragile
- •Yet the company avoided selling BTC
mNAV later rebounded to 4.0×, restoring financial flexibility.
So while the situation is dangerous, it is not existential yet. But the longer the valuation remains depressed, the greater the structural pressure becomes.
Outlook: Can Shareholders Lose Even More?
Short-term risks
- •Continued share dilution
- •Declining ability to finance BTC purchases
- •Mounting dividend obligations
- •Debt maturities getting closer
- •Underperformance vs. Bitcoin intensifying
Medium-term risks
- •Leverage may need to increase
- •Convertible debt may not convert
- •Market may price in higher default risk
Long-term perspective
Strategy’s model only works when the stock trades at a healthy premium to its Bitcoin holdings. If the valuation stays compressed, the company’s ability to sustain its BTC-buying strategy weakens significantly.
Shareholders are not guaranteed to lose everything — but the structural risks are rising, and the path forward is narrower than at any point since 2020.