Strategy’s Bold Bitcoin Bet Backfires as Shares Plunge to 15-Month Low

Strategy US5949724083

The corporate strategy of Strategy, formerly known as MicroStrategy, has long been a topic of intense debate for its single-minded focus on accumulating Bitcoin. The recent market downturn has starkly highlighted the risks of this approach, with the company's stock price collapsing to its lowest point in over a year. Remarkably, shares now trade below the implied value of the firm's massive Bitcoin treasury.

During Thursday's trading session, Strategy's stock closed at $143.19, registering a sharp decline of 9.63%. This price level represents the weakest performance for the equity since September 2024. From its peak, the share value has eroded by approximately 70%.

This dramatic slide is directly tied to a broad-based liquidation event across digital asset markets. The sell-off saw Bitcoin's price drop by 6.7%, while Ethereum fell 7.6%. Overall, the total market capitalization for cryptocurrencies contracted by six percent within a 24-hour window. As the largest institutional holder of Bitcoin globally, Strategy is uniquely exposed to these volatile swings, experiencing their full impact.

Unwavering Accumulation Despite Market Stress

Even against this turbulent backdrop, the company has continued to execute its core acquisition policy without pause. Its most recent purchase occurred on January 26, when it bought 2,932 Bitcoin for $264.1 million, paying an average of $90,061 per coin. Strategy's aggressive buying spree throughout January 2026 involved four separate transactions, acquiring a total of roughly 40,147 Bitcoin:

• January 5: 1,283 BTC for $116 million
• January 12: 13,627 BTC for $1.247 billion
• January 20: 22,305 BTC for $2.125 billion
• January 26: 2,932 BTC for $264 million

These additions bring Strategy's total holdings to 712,647 Bitcoin. The company's average purchase price stands at $76,037 per Bitcoin, with cumulative expenditures reaching $54.19 billion.

A Structural Flaw Emerges

The method used to finance the latest purchase reveals a growing concern for the business model. Strategy raised $257 million by selling 1.57 million common shares and secured an additional $7 million from the sale of preferred stock.

The core issue is that the stock is now trading at a discount to the net asset value of its Bitcoin holdings. Analysts note that the market-to-net-asset-value ratio has fallen below 1.0. Previously, the model was effective because Strategy could issue shares at a premium to its Bitcoin backing, using the capital to increase its reserves. When the stock trades at a discount, this financial leverage works in reverse, becoming a detriment.

Diverging Views from Market Experts

Analyst sentiment on the stock is currently mixed. Cantor Fitzgerald maintains an optimistic "Overweight" rating with a $213 price target. Mizuho continues to recommend the shares as "Outperform," though it did reduce its target price. TD Cowen also upholds a "Buy" recommendation but similarly adjusted its target downward.

In a separate corporate action, Strategy increased the annual dividend on its preferred stock from 10.75% to 11.00%. The firm now controls an estimated 3.4% of Bitcoin's maximum supply of 21 million coins—more than any other public company worldwide.

The market rout also pressured other crypto-focused equities. Whether Strategy can sustain its current trajectory under these new conditions will depend heavily on the future price direction of Bitcoin and a return to the crucial premium over its net asset value.