Analyzing Strategy’s Approach to Bitcoin Holdings

Overview

A detailed look at how Strategy has shaped its Bitcoin ownership model, the crucial factors that may prompt sales, and the significance of these developments in the broader financial context.

Key Highlights

• Strategy is recognized as the foremost corporate holder of Bitcoin, with approximately 650,000 BTC stored in its reserves.
• The company’s strategy revolves around procuring capital and converting it into Bitcoin while ensuring that its market-cap-to-Bitcoin value (mNAV) remains above 1.
• CEO Phong Le has articulated that the sale of Bitcoin is deemed a “last resort,” planned only if the mNAV dips below 1 and if the access to new funding significantly worsens.
• Even in the event of a Bitcoin sale, the fluctuating nature of the cryptocurrency market suggests that any selling would likely be partial rather than an outright liquidation.

Strategy, previously called MicroStrategy, has evolved over the last five years to establish itself as “the world’s first and largest Bitcoin Treasury Company.” As of December 2025, it holds nearly 650,000 Bitcoin, amounting to over 3% of the 21 million total supply—the highest ever owned by a publicly traded entity.

In traditional investment circles, the company’s stock has become a leveraged alternative to direct Bitcoin acquisition. Investors opt to buy the company’s stock, which concurrently raises funds with the intent of purchasing Bitcoin.

Recent Developments in Sales Strategy

The conversation around potential Bitcoin sales has gained traction due to CEO Phong Le’s remarks implying that sales could occur under specific circumstances. It’s vital to grasp that the focus should not solely be on the term “sell,” as the company views this as a necessary strategy for risk management rather than a fundamental shift in its long-term commitment to Bitcoin.

Mechanism of Strategy’s Bitcoin Operations

On a daily basis, the company employs a streamlined methodology:

1. Capital Acquisition: Strategy raises capital via common stock offerings, perpetual preferred stock series, and sometimes convertible debt instruments.
2. Bitcoin Acquisition: The significant share of this capital is invested into Bitcoin, which serves as its main reserve asset.
3. Performance Assessment: The company tracks various metrics to assess the sustainability of this model and its benefits to shareholders.

Key Metrics

• Bitcoin per Share (BPS): This indicates how much Bitcoin is effectively backing each diluted share.
• Market-cap-to-Net-Asset-Value (mNAV): This reflects the company’s total market valuation against its Bitcoin holdings’ value. A premium on mNAV signifies that the stock is valued higher than its total Bitcoin worth.

As long as the company maintains a favorable market valuation, it can raise equity or preferred stocks with minimal dilution and continue expanding its Bitcoin reserves. The management endorses this model as a sustainable pursuit.

Conditions for Potential Sales

Le has pointed out specific conditions that would necessitate selling Bitcoin:

• mNAV falls below 1: Signals that the market cap equates to or falls beneath the Bitcoin value held.
• Diminished Access to Capital: Signifies a scenario where investors refuse to support new equity or preferred stocks at reasonable conditions.

Selling Bitcoin in this context is deemed a “last resort” for fulfilling obligations like preferred dividends, rather than a shift of the treasury strategy.

Market Dynamics and Implications

Strategy’s ability to carry out risks is heavily dependent on various interconnected factors that would need to align before considering sales:

• Market Conditions and Bitcoin Pricing: A severe market downturn could diminish the value of the company’s Bitcoin reserves and negatively affect stock prices.
• Equity Value and mNAV Trends: Any interceptions that indicate that the company’s market cap could drop to par with its holdings would be critical.
• Funding Opportunities: The ongoing ability to issue new securities—ideally at sustainable rates—is vital for maintaining operation stability.
• Internal Financial Obligations: Significant annual liabilities in the form of dividends and debt repayments are also crucial elements in assessing the viability of Bitcoin sales.

Conclusion

Should Bitcoin sales become a reality, it is essential to understand the potential effects and the broader context surrounding Strategy’s holdings. With an active presence in a highly liquid market, even a controlled sale would unfold strategically rather than depend on sudden large exits.

Did You Know? Recent studies indicate that institutions currently control nearly 20% of freely mined Bitcoin.

Monitoring Strategy’s Actions

To stay informed on this developing story, consider the following:

• Follow US SEC filings for updates on capital raises and Bitcoin holdings.
• Keep track of Strategy’s announcements regarding purchases and reserves through their official channels to maintain accurate information.

Note: These insights are for informational purposes and do not constitute investment advice.