Will Capital Markets Keep Supporting MicroStrategy’s Bitcoin Initiative Without a Buffer?

MicroStrategy (recently rebranded as Strategy) has entered a critical phase since it made Bitcoin its main treasury asset. The company’s microstrategic net asset value (mNAV) premium has dropped to 1.04x, effectively eliminating the valuation buffer that previously enabled its notable outperformance compared to Bitcoin itself.

Key Takeaways

MicroStrategy, now called Strategy, is witnessing a significant drop in its mNAV premium.
The company holds substantial Bitcoin assets but faces scrutiny over its market valuation.
With a shift towards a yield-driven model, Strategy is becoming a Bitcoin-backed investment vehicle.
Recent accounting losses highlight vulnerabilities in the company's financial approach.
The future of Strategy hinges on capital market support without speculative premiums.

This change signifies a pivotal shift, indicating that Strategy’s future now relies less on Bitcoin's price movements and more on the willingness of capital markets to support its increasingly complex financial framework focused on Bitcoin.

mNAV Premium Drops to 1.03x Amid $17.4 Billion Q4 Loss Challenges Bitcoin Leverage

For much of 2023 and 2024, Strategy maintained premiums of over 2x, and sometimes even 2.5x, its net asset value (NAV). This premium allowed the company to issue equity, convertibles, and preferred stock under advantageous conditions, effectively recycling capital for further Bitcoin investments and benefiting shareholders. With the premium now nearly equal to 1x, this momentum has stagnated.

As of its latest disclosure, Strategy possesses around 673,783 BTC, valued at over $63 billion, in addition to approximately $2.25 billion in cash. However, discrepancies between its Bitcoin value and market capitalization prompt discussions about whether the stock is undervalued or if markets are finally accounting for the inherent risks of the model. Some investors view this contraction as an opportunity.

Adam Livingston commented on the 1.03x mNAV, suggesting it's “the best entry point” he has encountered. He believes that a modest 3% premium provides about 26% amplified Bitcoin exposure.

"This is the best entry point I've ever seen for MSTR.
mNAV is 1.03.
For just a 3% premium, you can buy 26% amplified Bitcoin exposure AND have giant Saylor increasing your Bitcoin exposure over time with Bitcoin yield enhancements."

Adam Livingston (@AdamBLiv)

Livingston anticipates that Strategy’s at-the-market issuance of its STRC preferred stock may soon fund another substantial Bitcoin purchase, potentially enabling Executive Chairman Michael Saylor to increase Bitcoin holdings per share without depending on high premiums.

This optimism is based on a new perspective regarding Strategy’s business model. Instead of merely acting as a growth equity tied to Bitcoin's price movements, it is increasingly being seen as a yield-driven Bitcoin collector. The STRC Variable Rate Series A Perpetual Stretch Preferred Stock currently offers an 11% annual dividend, with the next payment expected to be approximately $0.91 per share later this month.

Supporters believe this shift transforms the company into a hybrid Bitcoin-backed fixed-income entity. Joe Burnett, Director of Bitcoin Strategy at Semler Scientific, has posited that even if Bitcoin’s price remains stagnant, Strategy could theoretically maintain its digital credit dividend payments for decades due to the progressive devaluation of fiat money.

"If the price of Bitcoin stays steady, despite the supply of USD increasing by about 8% annually, $MSTR could cover dividend payments on their Digital Credit products for the next 76 years."

Joe Burnett, MSBA (@IIICapital)

In this view, the emphasis should be on duration rather than short-term price fluctuations.

Accounting Losses Reveal Vulnerabilities in Strategy’s Post-Premium Model

This shift towards a yield-centric strategy coincides with the revelations in Strategy’s financial statements, which highlight increasing strain. In its January 5, 2026, Form 8-K, the company reported a staggering $17.44 billion unrealized loss on digital assets for the fourth quarter of 2025 and a $5.40 billion unrealized loss for the entire year.

While these losses are based on accounting principles and linked to Bitcoin's price drop in Q4, they have significant real-world consequences. Current accounting regulations classify digital assets as indefinite-lived intangible assets, which require companies to recognize impairments during downturns while prohibiting upward adjustments during recoveries. Critics argue that these optics are more significant now that the premium has diminished.

Analyst Novacula Occami noted ongoing underperformance, indicating that Strategy’s shares have lagged behind Bitcoin across one-month, six-month, and one-year timeframes, thus challenging the premise that MSTR should outperform direct Bitcoin investments.

"For all the tweets from @saylor and his staunch followers, the reality is $MSTR has underperformed BTC—not only today (by 0.9%), but also over the last month (by 12%), six months (by 45%), and one year (by 48%). $MSTR was expected to excel compared to BTC, not fall behind."

Novacula Occami (@OccamiCrypto)

Others caution that continued equity issuance at diminished premiums may degrade shareholder value. Brennan Smithson argues that lack of demand for preferred stocks might obligate Strategy to lean on dilution to fund both dividends and Bitcoin acquisitions.

"People will keep defending Saylor’s hasty dilution strategy as long as there’s a ‘1’ in the hundredths spot. They don't realize he might add a decimal point just to extract every last bit of premium from $MSTR holders."

Brennan Smithson (@SmithsonBrennan)

This situation mirrors the critical question facing Strategy in 2026: can Bitcoin-native corporate finance operate without speculative premiums? With the mNAV approaching 1x, every attempt to raise capital is subject to careful examination. Issuing shares or preferred stocks no longer automatically increases Bitcoin per share, and it may instead signal weakness if demand wavers.

The optimistic scenario rests on patience. Advocates suggest that gradual Bitcoin appreciation, ongoing currency devaluation, and prospective interest rate cuts could restore confidence in Strategy’s yield model. Conversely, skeptics warn that without renewed interest from capital markets, the initiative could stagnate, transforming Strategy into an unstable and underperforming stand-in rather than a superior option to direct Bitcoin investments or ETFs.

These differing viewpoints position Strategy as a live experiment testing whether capital markets will continue funding leveraged Bitcoin exposure in a post-hype environment, now stripped of the premium shield.