Michael Saylor's Bitcoin Strategy Faces Major Setbacks for Over 100 Companies

In recent developments, numerous companies that emulated Michael Saylor's Bitcoin strategy are experiencing significant drops in shareholder value. According to Bloomberg, these digital asset treasury firms have seen median stock prices fall by 43% this year, even while the overall market has risen.

Key Takeaways

Companies following Michael Saylor's Bitcoin strategy have seen median stock prices drop 43% this year.
Initial success was observed for over 100 companies converting to cryptocurrency assets, but a sharp market correction has since emerged.
Companies are heavily burdened by debt obligations that their crypto holdings cannot cover.
Strategy's CEO has suggested potential Bitcoin sales to meet financial obligations, contradicting previous beliefs about not selling assets.

Michael Saylor's Bitcoin Playbook Backfires on 100+ Companies

Michael Saylor's Bitcoin Strategy - DAT Returns Chart

In the first half of 2025, over 100 public companies opted to transform into cryptocurrency-holding entities, investing billions in Bitcoin and other tokens. While their stock prices initially soared, reality soon struck, leading to a challenging market correction.

Market Dynamics Shift

The Rise and Fall of the Strategy Model

Michael Saylor, through Strategy Inc., introduced an innovative model where corporate cash was converted into Bitcoin, turning his software firm into a crypto treasury. This approach gained traction until mid-2025, even attracting high-profile backers, including the Trump family.

SharpLink Gaming is a prime example of the enthusiasm surrounding this strategy. The company pivoted from its core gaming operations, appointed an Ethereum co-founder as chairman, and announced significant token acquisitions. This led to a skyrocketing stock performance of 2,600% over just a few days, but it later crashed by 86%, dropping its market valuation to less than the worth of its Ethereum assets.

Data from Bloomberg indicates that the median share price of 138 U.S. and Canadian digital asset treasuries has plummeted by 43% this year, significantly underperforming Bitcoin, which has only seen a 7% decline. In contrast, the S&P 500 index gained 6%, and the Nasdaq 100 rose by 10%. Shares of Strategy have plummeted 60% from their highs in July, even though they surged over 1,200% since the firm began acquiring Bitcoin in August 2020.

Michael Saylor's Bitcoin Strategy - Strategy Shares Chart

The Debt Dilemma

The issues facing these companies are largely tied to how they financed their cryptocurrency purchases. Strategy and its followers raised over $45 billion through convertible bonds and preferred shares, primarily to amass digital assets that do not yield cash flow. This has led to a dangerous mismatch where obligations for interest and dividends are far higher than what these crypto holdings can support.

Directly, Strategy has fixed annual obligations ranging from $750 million to $800 million related to preferred shares. Companies that opted for riskier cryptocurrencies rather than Bitcoin suffered even greater losses, exemplified by Alt5 Sigma, which has seen its stock drop over 85% since June.

Michael Saylor's Bitcoin Strategy - ALT5 Sigma Corp Shares Chart

In an effort to resolve funding difficulties, Strategy raised $1.44 billion via stock sales to cover 21 months of dividend payouts.

Potential Financial Adjustments

Recently, CEO Phong Le indicated that selling Bitcoin could be considered if it became necessary to maintain operational cash flow, especially if their market valuation dipped below their Bitcoin assets. This stance marks a significant shift in Strategy’s robust positioning against selling Bitcoin, which Saylor had previously staunchly defended.

His comments sent ripples through the digital asset treasury sector, provoking concerns that a downward spiral could ensue. If crypto sales led to falling token prices, this could further depress valuations of treasury companies, possibly triggering more selling.

The rate of Bitcoin acquisition by Strategy has recently plummeted from a peak of 134,000 BTC in 2024 to only 9,100 BTC in November, with minimal additions in December. Currently, the company holds around 650,000 BTC, valued at over $56 billion, representing more than 3% of Bitcoin’s total supply.

Market observers are also worried about leveraged traders who could face margin calls, which might lead to widespread sell-offs in the market. Despite the creation of a $1.4 billion reserve fund for imminent dividend obligations, shares of Strategy are projected to fall by 38% this year, underscoring the precarious situation amid its substantial Bitcoin holdings.