Investor caution is growing as Michael Saylor's Bitcoin-focused firm Strategy once again approaches key valuation benchmarks. The growing possibility that the company's stock price could approach or fall below the value of its Bitcoin holdings is challenging the "premium" investment argument.
Strategy's stock price rebounded slightly in early trading on January 2nd, but remains down approximately 66% from its July high. As of that day, the company's mNAV (market-to-book value) multiple stood at 1.02, posing a growing risk of falling below 1.0. If this figure falls below 1.0, the market would undervalue Strategy's Bitcoin holdings.
This is more than just a simple number. When mNAV falls below 1.0, investors have less incentive to buy strategy stocks. Directly purchasing Bitcoin is a better investment, without the fees and dilution risks. Indeed, historically, when mNAV falls below this threshold, selling pressure has tended to intensify.
Why Bitcoin's Leading Stocks Are Being Discounted
Strategy has been aggressively buying Bitcoin since August 2020, holding a total of 672,497 coins. This is the largest holding by a single company worldwide. The average purchase price is approximately $75,000 (approximately KRW 108.47 million). Considering that Bitcoin is currently trading around $90,000 (approximately KRW 130.14 million), this represents an unrealized profit of approximately 20%.
However, the market is not fully reflecting this in the stock price. The underlying market capitalization is estimated at approximately $45 billion (approximately KRW 65.7 trillion), and after dilution, it's estimated at approximately $50 billion (approximately KRW 72.3 trillion). This means the current stock price is already at a discount to its assets. The mNAV, based on the enterprise value including debt and cash, is estimated to be below 1.0, further fueling investor concerns.
Selling stocks to buy bitcoin is hitting its limits.
The strategy has grown by raising funds through equity issuance and then reinvesting them into Bitcoin purchases. This structure is only viable if the premium is maintained. However, if mNAV falls below 1.0, even raising capital at the risk of dilution could backfire.
As if conscious of this, management recently announced that it secured $747.8 million (approximately KRW 1.08 trillion) in paid-in capital through an ATM (at-market issue) program, securing the capacity to pay interest and dividends for the next 21 months. While short-term financial pressures have been alleviated, the gap between stock price and asset value persists.
Management has stated that selling Bitcoin is a "last resort." They will only consider a sale if all other funding sources are blocked and the company's value falls below its asset value.
Stock price movements that are out of sync with Bitcoin's soaring performance
While Bitcoin has recently rebounded to a 28% drop from its all-time high, Strategy's stock price has fallen nearly 50% in 2025 and more than 60% over the past six months, making it the worst performer in the Nasdaq 100.
In the first half of this year, its stock price soared thanks to the surge in Bitcoin prices. However, in the second half, risk aversion and a sharp decline in its stock price erased all of its gains. This has led to growing skepticism that Strategy is being treated more as a sort of "Bitcoin ETF alternative investment" than as an actual operating company.
Some critics, including economist Peter Schiff, have pointed out that this downward trend is actually burdening investors with excessive Bitcoin buying strategies.
๐ Market Interpretation
As the possibility grows that strategic stocks will be undervalued compared to Bitcoin, investor confidence is being tested. As the equity premium disappears, existing growth strategies could also face a crisis.
๐ก Strategy Points
While securing cash through ATMs has overcome the immediate liquidity crisis, if stock prices continue to fall below the value of Bitcoin holdings, raising new funds will become more difficult.
๐ Glossary
- mNAV: Market-to-Net Asset Value Ratio, calculated by dividing market capitalization by the value of assets held. A ratio above 1.0 indicates a premium, while a ratio below 1.0 indicates a discount.
- ATM Program: A method of raising funds by flexibly issuing stocks according to market prices on the exchange.
๐ก Want to know more? AI-prepared questions for you:
A. Strategy has transformed from a software company into a Bitcoin holding company. It had been growing its assets by selling its stocks at high prices and using the proceeds to buy Bitcoin. However, its stock price recently fell 66% from its July high. This is because investors are no longer willing to pay a premium for the company's stock. Simply put, there's a growing consensus that direct Bitcoin purchases are a better option.
A. mNAV is a figure calculated by dividing a company's market capitalization by the value of its Bitcoin holdings. A value of 1.0 means the company's stock price is exactly equal to the value of Bitcoin, while a value below 1.0 means it's trading at a lower price than Bitcoin. Strategy's current mNAV is around 1.02, which is very dangerous. If it falls below 1.0, it becomes more efficient for investors to buy Bitcoin directly rather than the company's stock.
A. Yes, Strategy has been accumulating Bitcoin since August 2020 and currently holds approximately 672,000 Bitcoins, the largest holding among corporate holdings worldwide. The average purchase price is approximately $75,000, and with Bitcoin currently trading around $90,000, the company holds approximately $20 billion in unrealized profits. However, the company's market capitalization is approximately $45 billion, which is undervalued compared to the value of its assets.
A. Management has stated that they may sell Bitcoin in this case. However, they emphasized that this would be a last resort and a decision made only after all other funding options have been exhausted. The company recently secured enough cash through a stock sale to cover approximately 21 months of dividends and interest expenses, so there's no immediate need to sell Bitcoin. However, this threshold is psychologically significant, and investor confidence could be shaken.
A. Strategy's business model relies on selling stocks at a premium to buy Bitcoin. For this model to work, investors must pay a higher price for the company's stock than they would for Bitcoin directly. However, investors have recently refused to accept this premium, and Strategy's stock price has not kept pace with Bitcoin's price rise. Furthermore, the stock price has fallen by more than 60% over the past six months, significantly shaking investor confidence.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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