Strategy Valuation Drop Threatens Key Bitcoin Funding Engine

The ratio of the company’s enterprise value to its bitcoin holdings, or mNAV, fell below parity, meaning that its financing advantage is gone, according to the report.

This occurred after seven months of Strategy’s market value trading below the value of its bitcoin holdings, and after the company’s shares dropped more than 80% from the record high they achieved in November 2024, the report said.

The mNAV of less than 1.0 signals that investors don’t value Strategy more than its bitcoin holdings and sparks doubts that the company can continue using the financing model it has used to purchase bitcoin, the report said.

For bitcoin, this raises questions about one of its biggest sources of incremental demand at a time when institutional buyers like Strategy account for a growing share of demand for the cryptocurrency, per the report.

Strategy Founder and Executive Chairman Michael Saylor said in a Friday post on X: “Volatility tests every capital structure. Strategy remains focused on Bitcoin, disciplined capital allocation, credit quality, and long-term value creation. We appreciate our investors and will continue to execute with transparency and resolve.”

Strategy said in a June 22 post on X: “Strategy has increased its USD Reserve by $300 million to $1.4 billion and plans to continue replenishing it to support the credit quality of its Digital Credit securities. We also acquired 529 [bitcoin] for $35 million, increasing our [bitcoin] Reserve to [847,363].”

It was reported Wednesday (June 24) that the price of bitcoin dropped below $60,000 for the first time since the beginning of June and that it fell as low as $59,023, which was the lowest price since October 2024.

The report attributed bitcoin’s decline in part to Strategy facing billions of unrealized losses. It also pointed to retail traders losing interest in bitcoin as they shift their focus to artificial intelligence stocks, as well as exchange-traded fund (ETF) buyers being underwater if they bought bitcoin when it was far higher.

It was reported June 5 that as bitcoin lost about half its value since its October 2025 peak, the value of many of the digital asset treasury companies that emerged during the digital asset boom fell even more.

Saylor pioneered the crypto treasury method of selling shares or borrowing funds and putting that cash into crypto in 2020, when he turned his software company, then called MicroStrategy, into Strategy.