Strategy’s NAV falls under 1, critics raise alarm after $5.7B Bitcoin wallet move

Bitcoin's (BTC) recent price decline has brought the asset to its lowest point since May 2025. This downturn has also impacted Strategy's MSTR stock, with share prices falling to $197 in pre-market trading for the first time since October 2024.

Key takeaways from the situation include:

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  Strategy's significant Bitcoin transaction, valued at $5.77 billion, is believed to be a custodial relocation.
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  MSTR's Net Asset Value (NAV) multiple has dropped below one for the first time, raising investor concerns about the company's valuation.
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  Despite market stress, one Bitcoin analyst suggests that forced liquidation for Strategy remains unlikely.

Wallet Move Triggers Market Anxiety After Large Bitcoin Transfer

Market anxiety intensified on Friday following Strategy's transfer of 58,915 BTC, equivalent to $5.77 billion, into new wallets. This move immediately sparked speculation on X (formerly Twitter) that the company might be preparing to sell a portion of its holdings. The situation was further amplified as bots and algorithmic traders reacted aggressively to the transaction.

Analysts were quick to address the panic, suggesting that the transfer was likely a custody restructuring rather than a distribution. One crypto analyst explained:

Arkham AI supposes this is wallet rebalancing rather than distribution. The market is reacting, and the bots are selling. Any excuse or piece of fake news is enough to screw over the smaller players.

Despite this clarification, sentiment in the crypto market remained fragile as traders assessed potential underlying issues.

MSTR's Net Asset Value Drops Below One, A First for Strategy

A more concerning development emerged from Strategy's valuation metrics. For the first time, Strategy's Net Asset Value (NAV) multiple fell below one. This indicates that the market is now valuing MSTR shares at less than the value of the Bitcoin it holds, a significant shift from its historical premium pricing. Currently, the mNAV value has returned above one, standing at 1.09, though this is still considered low.

A NAV below one signifies that Strategy's market value has decreased to less than the value of its BTC holdings minus liabilities. This suggests that the market is pricing the company at a discount relative to its Bitcoin reserves. Such a situation typically reflects investor concerns regarding debt risk, liquidity, or the long-term viability of the company's aggressive Bitcoin acquisition strategy.

Furthermore, Vetle Lunde, head of research at K33 Research, highlighted a $79.2 billion drop in Strategy's equity premium since November 2024. Lunde noted that despite Strategy raising $31.1 billion through dilution, approximately $48.1 billion in implied Bitcoin demand did not translate into actual Bitcoin purchases. Essentially, investor interest in MSTR no longer directly fuels Bitcoin acquisition as it may have previously.

Despite these valuation concerns, Bitcoin proponent Willy Woo downplayed fears of liquidation. The analyst stated that Strategy is unlikely to face forced Bitcoin sales in the next bear market, provided MSTR trades above $183.19 by 2027. This price level is associated with approximately $91,500 per BTC, assuming a 1x NAV multiple. Woo cautioned only of a potential partial liquidation if Bitcoin's performance lags during the anticipated 2028 bull cycle.