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MicroStrategy’s market premium on its Bitcoin holdings has narrowed to near parity, raising questions about the future of MicroSailor’s leveraged Bitcoin model.
Recent disclosures reveal that the company owns 649,870 BTC at a cost of about $48.4 billion, but its shares are no longer trading at the high yields that supported the previous expansion.
Decrease in insurance premiums and increasing capital pressure
show low mNAV The company fell below 1x in November. “mNAV”, or market value to net assets, measures how much investors are willing to pay above (or below) the value of the underlying Bitcoin strategy.
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That issue is important because the entire accumulation strategy is based on issuing shares at a premium – which allows each new share sold to increase Bitcoin per share for existing shareholders.
This sharp reversal in mNAV came after a broader market decline. Bitcoin has fallen more than 30% since its peak in October, To fall below $90,000.
At the same time, The strategy’s shares fell even fasterindicating concerns about the company’s reliance on capital markets and preferred stock costs.
The company’s capital structure has become a central issue. The company has only $54 million in cash and owes more than $640 million a year in preferred dividends.
The software company’s business still has negative cash flow for 2025, widening the gap between liabilities and internal liquidity.
As a result, the strategy was based on the capital markets. Collection approx $20 billion in the first nine months From 2025 through convertible shares, preferred shares and common shares in the market.
Funding continued to accumulate Bitcoin while servicing older instruments that carry ever higher coupons.
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However, the mechanisms that made this model increasingly valuable have weakened. When Strategy traded at significant premiums to NAV, the share issuance resulted in more Bitcoin per share for holders.
This effect disappears when the premium collapses. Issuing shares close to NAV runs the risk of dilution rather than appreciation.
The pressure increased as the cost of capital increased. The company raised the yield on its preferred STRC from 9% in July to 10.5% in November to maintain par value.
New Preferred Offers carry coupons higher than 10%, with penalty rates up to 18% if payment is not made. These conditions increase the annual burden and reinforce investors’ concern for sustainability.
Market liquidity, MSCI risk and the future of the premium
Market confidence deteriorated further after the October 10 crisis. Bitcoin fell about 17% as leveraged liquidations exceeded $19 billion. The depth of the order book has collapsed in the exchanges, highlighting the fragility of liquidity during stress.
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For holders of more than 3% of the Bitcoin supply, this episode has reinforced concerns about a potential forced sale.
The threat of cursor inclusion further complicates the issue. MSCI is consulting on excluding companies with assets that exceed 50% of cryptocurrencies from their indexes.
The strategy suggests a share of 77% of Bitcoin in terms of the share of assets. JPMorgan estimates that such exclusion It could lead to a negative outflow of about $2.8 billion, with a maximum of $8.8 billion possible if other index providers follow suit.
If the index decides to phase out in February 2026, mNAV can reduce for MicroStrategy no longer. Lower premiums reduce the effectiveness of equity issuance, which the Strategy uses to manage its liabilities and continue accumulation.
The continued discount will complicate refinancing and hinder the company’s ability to defend its capital structure.
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The strategy argues that its balance sheet offers long-term strength. It recently claimed to provide “71 years” of dividend coverage based on the current market value of its Bitcoin.
However, these calculations assume a smooth sale with no price impact and no tax liability. The October crisis showed how quickly liquidity evaporates under pressure.
Bringing back the Bitcoin premium for MicroStrategy?
The narrowing of mNAV reflects the market’s reassessment of leverage, liquidity and risk. Investors seem less willing to pay a premium to get the exposure they can now access through spot bitcoin ETFs without the corporate debt and blue-chip equity layers.
The premium may return if the value of Bitcoin rises sharply or if the index providers clear their position. However, structural pressures remain.
Rising dividend obligations, negative operating cash flow, and weak revenue expectations leave the Strategy more exposed than before.
Until these pressures subside, the market’s message is clear. Investors no longer pay more for the Strategy Model, and the easy days of incremental issuance seem to be over.
The return of the premium now depends on the strength of Bitcoin, and the decisions IndicatorThe ability of the strategy to overcome its most difficult periods to date.
