In the third quarter of 2025, as Bitcoin surged like a rocket, MicroStrategy (MSTR, or “Strategy”) lit up market imagination with its earnings report. After the U.S. market closed on October 31, the software company reported quarterly net income of $2.8 billion, far above expectations. EPS also beat analysts’ cautious estimates with ease. This huge profit did not come from its core business — the enterprise analytics software still showed flat revenue — but from the company’s crypto hoard worth about $69 billion, especially the unrealized gains on its Bitcoin holdings.
Bitcoin hit a new all-time high during the quarter. That pushed Strategy’s holdings to about $73.2 billion in market value, making the company look like a crypto fund in a tech costume.
Q3’s Crypto Feast
Five years ago, Michael Saylor made a bold bet. He put the company’s idle cash into Bitcoin and started a new “treasury reserve” model. Today this idea has spread across the industry. Tesla and Block followed, but Strategy remains the biggest player. It holds more than 640,000 bitcoins, with a total cost of about $47.4 billion and an average purchase price of only $74,000 per coin.
By quarter end, the tide of unrealized gains rolled in. Year-to-date return reached 26%, just one step from Saylor’s 30% full-year goal. After the report, MSTR rose 5.71% after hours to close at $302, as if the market briefly forgot persistent doubts.
Operating income hit a record $3.9 billion, and revenue beat expectations by 9.9%. All this seemed to declare: Bitcoin is no longer a bet, but Strategy’s “profit engine.”
Stock Winter: A Moment for Investor Scrutiny
Yet the joy came with loud alarm bells. Since last November, when the stock hit its record $500 high, MSTR has lost 44% of its value, wiping out the rich premium to its Bitcoin holdings built over prior years.
Why? Investors started to ask what this company really is. Is it a software vendor, or a Bitcoin leverage machine in public-company clothing?
Core software revenue barely tops $100 million. It is far from enough to cover nearly $700 million a year in interest and dividends, most of which fund debt used to buy more Bitcoin.
In October, the stock moved lower. It fell from $293 on the 21st to $286 on the 29th. There was a small bounce, but the overall tone stayed weak. This is not only a number. It is a broad doubt about single-asset exposure: if Bitcoin is the star, when will software get a share?
The Financing Fog: From a Cold Reception to an International Push
Strategy’s Bitcoin empire needs constant financing. But the recent preferred stock sale met a cold market. Funds raised were far below Saylor’s hopes. As a result, the company added only 117,000 bitcoins this quarter, and the buying pace slowed.
Saylor’s “21/21 plan” — to hold 210,000 bitcoins by 2027 — sounds bold, but the financing bottleneck shows fatigue.
On the call, CEO Phong Le was frank. The company is looking to international markets for easier funding. It is even planning an ETF based on preferred shares. This may be a solution: attract institutions, spread debt risk, and make Strategy’s Bitcoin empire easier to access for global investors. But it also shows the model’s fragility. If Bitcoin pulls back, unrealized gains can vanish at once. Leverage will work like a magnifier and burn the stock price.
If annual interest costs keep exceeding software revenue, debt turns from help to shackle.
MNAV’s Mirror: The Pricing Code of a Leverage Strategy
To read Strategy’s valuation logic, use one metric: mNAV, short for MicroStrategy Net Asset Value. It is simple and sharp. It divides the company’s market cap by the net value of its Bitcoin holdings after subtracting net debt. It shows how the market prices this “Bitcoin proxy stock.”
Using the latest numbers: MSTR’s market cap is about $79 billion. Bitcoin holdings are $73.2 billion. Net debt is about $11.6 billion. Net value is about $61.6 billion. So mNAV is about 1.28. This means the market still pays a 28% premium for Saylor’s vision and Bitcoin’s liquidity. But it is well below the 2.05× peak in November 2024, when bull-market fever made everything look like a perpetual motion machine.
mNAV is a mirror that shows the double-edged nature of leverage. If Bitcoin rises another 10%, holdings go to about $80.5 billion and mNAV may slip to around 1.15, making the valuation look “cheaper.” If Bitcoin falls, the multiple can jump above 1.5, and stock volatility will grow.
This metric does more than quantify a premium. It also exposes risk. Strategy’s Bitcoin exposure is above 90%, much higher than other holders such as Marathon Digital with a 0.9× mNAV. It reminds us: Saylor’s strategy boosts returns in a bull market, but also puts the company on thin ice. Looking back, mNAV moved with Bitcoin cycles: up to 2.1× in the financing frenzy of November 2021, down to a 0.85 discount in the 2022 bear-market low.
Today’s 1.28 sits between optimism and caution. It suggests the market recognizes Strategy as a “pure proxy,” but waits for new catalysts. Examples include a Fed rate cut to lower funding costs, or the ETF plan going live.
A Crossroads at the Crypto Frontier
Looking ahead, Strategy’s story is far from over. If Bitcoin holds the $110,000 level, enterprise value could break $98 billion with ease, and mNAV at 1.5 could restore its “leverage king” image. Saylor’s global push and ETF innovation may end the financing winter and help the ship avoid debt reefs.
But risks stay close. Regulation, market pullbacks, or continued weakness in software could erase the premium.
For investors, this is not a simple stock buy. It is a bet on a vision. In the rough waters where traditional finance meets crypto, Strategy remains the brightest mirror.
In the short term, the November earnings call may be a turning point. In the long run, this story reminds us that leverage is tempting, but it always requires a steady heart.