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MicroStrategy (now Strategy) is in the most critical phase of the strategy since adopting Bitcoin as a major asset of the treasury. The company’s strategic net value premium (mNAV) fell to 1.04x, effectively wiping out the valuation buffer fueling its outperformance relative to Bitcoin itself.
This shift represents a regime change, where the future of the strategy no longer depends primarily on the Bitcoin price path, but rather on whether the capital markets are still willing to finance their increasingly sophisticated financial structure based on Bitcoin.
mNAV strategy premium drops to 1.03x as Bitcoin leveraged model challenges $17.4 billion quarterly losses.
For most of 2023 and 2024, the Strategy traded at premiums exceeding 2.5x net asset value (NAV).
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This first allowed the company to issue shares, convertible bonds and preferred shares on favorable terms, recycling the capital in Additional Bitcoin purchases Increase shareholder exposure. With the price now approaching parity, the steering wheel stopped working.
own Strategic currently holds about 673,783 BTC worth more than $63 billion as of its most recent disclosure, plus about $2.25 billion in cash. However, its market capitalization indicators are such that:
- Fundamental – $47 billion
- Diluted – $53 billion
- Enterprise value – $61 billion
This disparity between the value of Bitcoin and the market capitalization raises the debate about whether the stock is undervalued or whether the markets are finally pricing in the structural risks of the model. Some investors see this pressure as an opportunity.
Adam Livingstone described the 1.03x mNAV as “the best entry point” he had seen. He argues that a modest premium of 3% still provides amplified exposure to Bitcoin by around 26%.
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From his point of view, he can finance a strategic problem For STRC preferred stock Another big Bitcoin purchase is coming soon to the market. This will allow CEO Michael Saylor to increase Bitcoin per share without relying on ultra-high premiums.
This optimism is based on a fundamental reframing of Strategy’s work. Rather than being a growth stock that relies on Bitcoin’s momentum, Strategy is increasingly positioning itself as a performance-driven Bitcoin accumulator.
Shares of STRC Variable Rate Series A Perpetual Stretch Preferred Sold now carry an 11% annual dividend, with the next payment expected to be approximately $0.91 per share later this month.
Supporters argue that this turns the company into a form of fixed income backed by bitcoin. Joe Burnett, Director of Bitcoin Strategy at… Semler Scientific IncEven if the price of Bitcoin remains stable, the strategy could theoretically serve digital credit distributions for decades. In his post, Burnett cites the long-term decline in the value of fiat currencies.
In this framework, duration, not short-term price action, is the key variable.
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The accounting losses reveal the fragility of the post-premium model of the strategy
This return-focused shift comes as the strategist’s finances highlight growing tensions. in Form 8-K On January 5, 2026, the company disclosed an unrealized loss of $17.44 billion in digital assets for the fourth quarter of 2025 and an unrealized loss of $5.40 billion for the full year.
While these losses are based on accounting and are linked Bitcoin declined in the fourth quarterHowever, it has real repercussions. Under current accounting rules, digital assets are treated as indefinite-lived intangible assets.
This forces companies to recognize impairments during the downturn without allowing an upward remeasurement during the recovery. Critics argue that these demonstrations are more important now that the price premium has disappeared.
Analyst Novakula Okami noted a continued deterioration in performance, noting that Strategy shares lagged Bitcoin over the horizons of one month, six months and one year. In doing so, he broke the basic premise that MSTR should outperform Bitcoin’s spot exposure.
In his assessment, the collapse of the mNAV premium by mid-2025 has weakened Strategic’s ability to issue “good” and “better” convertible bonds, leaving common shareholders vulnerable to dilution without any upside.
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Others warn that the continued issuance of shares at less significant premiums erodes shareholder value. Among them is Brennan Smithson, who He argues This insufficient demand for preferred products may force the strategist to rely on dilution to finance profits and purchases of Bitcoin.
This reflects the controversy The central question facing strategists in 2026: Can Bitcoin’s original institutional funding operate without speculative premiums?
With mNAV approaching 1x, any capital increase is closely scrutinized. Issuing preferred stock or cards no longer automatically increases Bitcoin per share. On the other hand, there is a risk of weakness if demand decreases.
The false case depends on patience. Supporters believe that the moderate rise of Bitcoin, and the continued decline in the value of the dollar, The possibility of lowering interest rates It can gradually regain confidence in the strategy’s return model.
The bearish case warns that without renewed capital market appetite, the experiment may stall. Such an outcome can turn a strategy into a volatile and underperforming alternative instead of a better alternative to direct Bitcoin or ETF.
These prospects make the strategy a direct test to test whether capital markets will continue to finance Bitcoin exposure with leverage when the hype fades and the extra premium cushion disappears.
