Strategy (MSTR): How the Bitcoin Treasury Company Built Its BTC Bet and the Risks Ahead
Strategy (formerly MicroStrategy) pivoted from enterprise software to become the world’s largest corporate Bitcoin treasury under co-founder Michael Saylor. Since its first $250m BTC purchase in 2020, Strategy has repeatedly raised capital—primarily via convertible notes and new share classes (e.g., STRK, STRC, STRD, STRF, STRE)—to buy more Bitcoin. The firm announced plans in late 2024 to raise up to $42 billion and has executed multiple debt and preferred-stock offerings, plus a $2 billion convertible notes sale in Feb 2025. Strategy rebranded in Feb 2025 to emphasize its Bitcoin focus.
Critics warn of leverage risk: Strategy’s share price (MSTR) historically traded at a premium to its Bitcoin holdings (mNAV), but declines in BTC and MSTR caused mNAV to fall below 1x by early 2026. MSTR’s share price dropped ~70% from Aug 2025 to Feb 2026 and the company reported a $12.4bn Q4 2025 loss. Skeptics say a severe MSTR decline could force the company to sell BTC to meet convertible-note obligations, potentially amplifying market downside. In response, Strategy established a cash reserve (started with $1.44bn in Dec 2025 and later increased) and Saylor says the firm can refinance debt and cover obligations even if BTC falls substantially.
Key figures and stats: Michael Saylor (co-founder/chair), Strategy (ticker MSTR), corporate rebrand in Feb 2025, initial BTC buy $250m (2020), planned $42bn raise (Oct 2024), multiple equity/debt offerings including $2bn notes (Feb 2025), mNAV peaked ~3.89x (Nov 2024) then dropped below 1x (early 2026), ~70% MSTR share decline (Aug 2025–Feb 2026), $12.4bn loss Q4 2025, $1.44bn+ cash reserve initiated Dec 2025.
SEO notes: main keyword "Strategy MSTR" appears multiple times; secondary keywords include "Bitcoin treasury", "Michael Saylor", "convertible notes", "mNAV", "corporate BTC reserve". This concise summary targets traders needing the company’s exposure, leverage mechanics, and potential liquidation risks.
Bearish
This news is categorized as bearish because Strategy’s business model ties large-scale Bitcoin accumulation to periodic debt and equity raises, creating leverage that can amplify downside. The report shows MSTR’s mNAV slid below 1x and the share price dropped ~70% over six months (Aug 2025–Feb 2026), coupled with a $12.4bn Q4 2025 loss—markers of elevated liquidation risk. If MSTR equity weakens further, convertible-note holders could pressure the company to refinance or sell BTC to meet obligations. Forced or expected sales from a major corporate holder can transmit downward pressure to BTC prices, increasing short-term volatility and downside risk for traders.
Short-term impact: Elevated tail risk and higher volatility. Traders should expect potential sell-side pressure around corporate debt maturities, equity offerings, or any signals of refinancing difficulty. Correlation between MSTR stock and BTC may increase; large-scale BTC sales or market fear could trigger rapid price drops.
Long-term impact: Neutral-to-bearish structural concern for BTC market liquidity when large corporate treasuries use leverage. However, Strategy’s cash reserves and management statements about refinancing mitigate some immediate forced-sale risk. If Strategy successfully refinances and sustains purchases, it could remain a long-term BTC buyer, which would be bullish. But given current metrics (mNAV<1, large losses, substantial convertible obligations), the immediate probability favors downside scenarios until balance-sheet risks are demonstrably reduced.
Historical parallels: Similar dynamics occurred when leveraged miners or leveraged ETF providers faced margin calls—forced asset sales accelerated price declines. The 2022 Terra/Luna and broader liquidation cascades show how leverage and concentrated selling can amplify market drops. Traders should monitor Strategy’s debt schedule, cash reserve levels, and convertible-note holder activity as key catalysts.