Will Capital Markets Continue Funding MicroStrategy’s Bitcoin Experiment Without a Premium Cushion?
MicroStrategy (now Strategy) is in its most consequential part since adopting Bitcoin as its major treasury asset. The firm’s mNAV (microstrategic internet asset worth) premium has fallen to 1.04x, successfully erasing the valuation buffer that when powered its dramatic outperformance versus Bitcoin itself.
The shift marks a regime change, with Strategy’s future now not hinging totally on Bitcoin’s worth trajectory, however on whether or not capital markets are nonetheless prepared to fund its more and more advanced Bitcoin-native monetary construction.
Strategy mNAV Premium Falls to 1.03x as $17.4 Billion This fall Loss Challenges Bitcoin Leverage Model
For a lot of 2023 and 2024, Strategy traded at premiums exceeding 2x, and at occasions 2.5x, its internet asset worth (NAV).
That premium allowed the agency to difficulty fairness, convertibles, and most popular inventory at favorable phrases, recycling capital into additional Bitcoin purchases and amplifying shareholder publicity. With the premium now close to parity, that flywheel has stalled.
Strategy at present holds about 673,783 BTC, valued at greater than $63 billion on the time of its newest disclosure, alongside roughly $2.25 billion in money. Yet, its market capitalization metrics are such that:
- Basic- $47 billion
- Diluted – $53 billion
- Enterprise worth – $61 billion
This mismatch between its Bitcoin worth and market cap raises debate over whether or not the inventory is undervalued or whether or not markets are lastly pricing within the structural dangers of the mannequin. Some buyers see the compression as a chance.
Adam Livingston described the 1.03x mNAV as “the very best entry level” he has seen. He argues that a modest 3% premium nonetheless gives roughly 26% amplified Bitcoin publicity.
In his view, Strategy’s at-the-market issuance of STRC preferred stock may quickly fund one other massive Bitcoin buy. This would enable Executive Chairman Michael Saylor to extend Bitcoin per share with out counting on excessive premiums.
That optimism rests on a elementary reframing of Strategy’s enterprise. Rather than a progress fairness levered to Bitcoin momentum, Strategy is more and more positioning itself as a yield-driven Bitcoin accumulator.
Its STRC Variable Rate Series A Perpetual Stretch Preferred Stock now carries an 11% annual dividend, with the subsequent fee anticipated to be round $0.91 per share later this month.
Supporters argue this transforms the corporate into a type of Bitcoin-backed fixed-income car. Joe Burnett, Director of Bitcoin Strategy at Semler Scientific, has argued that even when Bitcoin’s worth have been to stay flat, Strategy may theoretically service its digital credit score dividends for many years. In his publish, Burnett cites the long-term debasement of fiat currencies.
In this framing, length, not short-term worth motion, is the important thing variable.
Accounting Losses Expose the Fragility of Strategy’s Post-Premium Model
This yield-focused pivot comes as Strategy’s monetary statements spotlight rising tensions. In its January 5, 2026, Form 8-K, the corporate disclosed a $17.44 billion unrealized loss on digital belongings for the fourth quarter of 2025 and a $5.40 billion unrealized loss for the total yr.
While these losses are accounting-based and tied to Bitcoin’s Q4 drawdown, they carry actual implications. Under present accounting guidelines, digital belongings are handled as indefinite-lived intangible belongings.
This compels firms to acknowledge impairments throughout downturns with out permitting remeasurement upward throughout recoveries. Critics argue these optics matter way more now that the premium has vanished.
Analyst Novacula Occami pointed to persistent underperformance, noting that Strategy shares have lagged Bitcoin over one-month, six-month, and one-year horizons. With this, it has damaged the core thesis that MSTR ought to outperform spot BTC publicity.
In his evaluation, the collapse in mNAV premium since mid-2025 has undermined Strategy’s capacity to difficulty “low cost” convertibles and “costly” preferreds, leaving frequent shareholders uncovered to dilution with out upside.
Others warn that continued fairness issuance under significant premiums erodes shareholder worth. Among them is Brennan Smithson, who argues that inadequate demand for preferreds may drive Strategy to depend on dilution to fund each dividends and Bitcoin purchases.
This debate mirrors the central question facing Strategy in 2026: can Bitcoin-native company finance perform with out speculative premiums?
With mNAV close to 1x, each capital increase is scrutinized. Issuing shares or preferreds now not routinely will increase Bitcoin per share. Instead, it dangers signaling weak point if demand falters.
The bull case relies on persistence. Proponents imagine reasonable Bitcoin appreciation, sustained greenback debasement, and potential interest rate cuts may progressively restore confidence in Strategy’s yield mannequin.
The bear case warns that with out renewed capital market urge for food, the experiment may stall. Such an consequence may flip Strategy into a risky, underperforming proxy relatively than a superior different to direct Bitcoin or ETFs.
These views make Strategy a stay stress take a look at for whether or not capital markets will proceed to fund leveraged Bitcoin publicity when the hype fades, and the premium cushion is gone.
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