Strategy Inc Shares Trade at Discount to Bitcoin Holdings

Strategy US5949724083

Strategy Inc has unsettled investors in the final trading days of the year. The company's stock now trades below the implied value of its substantial Bitcoin treasury, marking a significant departure from its historical pattern. This shift forces a fundamental reassessment of its viability as a "Bitcoin leverage" play, particularly as its own financial forecasts weaken and the cryptocurrency market corrects.

A central pillar of Strategy Inc's investment thesis has crumbled. For years, the market valued the company at a premium to the spot value of its Bitcoin holdings. This premium reflected the structured access to crypto exposure and the underlying enterprise software business. That dynamic has now inverted.

The key metric of market value to net asset value (mNAV) has dropped below 1.0 for the first time in this cycle, reaching 0.988. This means the market is currently valuing the entire company at less than the worth of its Bitcoin reserve alone. The former premium has transformed into a discount, signaling growing skepticism about the sustainability of its hybrid model.

This de-rating coincides with a sharp correction in the crypto market. Bitcoin has retreated from its yearly highs above $126,000 to approximately $88,000. Despite this volatility, Strategy Inc remains aggressive. On December 16, 2025, the company executed another $1 billion Bitcoin purchase, further extending its leverage during a period of heightened market uncertainty.

Weak Guidance Triggers Sell-Off

The immediate catalyst for the stock's pressure was a disappointing outlook. Late last week, Strategy Inc—formerly known as MicroStrategy—issued its 2025 earnings guidance, which fell dramatically short of Wall Street's expectations.

Management projected earnings per share (EPS) in a range from a loss of $17 to a profit of $19. This is far below the previous analyst consensus of $31.97 per share. The unusually wide and decidedly lower range has injected significant uncertainty, forcing investors to price in more volatile profitability and reduced business visibility.

The stock declined to $158.81 on Friday. While it shows a weekly gain of roughly 13%, it remains down nearly 46% year-to-date. The technical picture appears strained: the share price trades well below its 200-day moving average of $276.87, and a Relative Strength Index (RSI) reading of 84.2 indicates a short-term overbought condition within a highly volatile environment.

Adding to the bearish technical signals, a daily "Death Cross" has been confirmed, where the 50-day moving average crosses below the 200-day average. Many traders interpret this pattern as indicative of sustained weak momentum.

Scrutiny on the Hybrid Business Model

Since rebranding from MicroStrategy in early 2025, the company has emphasized its dual identity: an enterprise analytics software provider and a major Bitcoin treasury. Recent turbulence, however, highlights the risks of this approach. The heavy reliance on digital asset prices dramatically increases the stock's volatility and brings risk management questions to the forefront.

Previously, a combination of operational cash flow and strategic debt issuance supported the narrative, justifying the stock's premium over its pure Bitcoin backing. The emergence of a discount suggests the market is taking a more critical view of the company's ability to service its debt in a prolonged "crypto winter" scenario.

Of particular note is a newly established reserve of $1.44 billion earmarked for dividends and debt service. While intended as a safety buffer, it also underscores the company's dependence on stable revenues and supportive Bitcoin prices. Reports of potential index exclusion risks due to persistent high volatility have further fueled investor skepticism, as forced selling by index funds could create additional downward pressure.

Key Developments at a Glance

• 2025 EPS Guidance: Range of -$17 to +$19, significantly below the $31.97 consensus.
• Technical Breakdown: Confirmed "Death Cross" and price far below the 200-day moving average.
• Valuation Discount: Market value falls below Bitcoin holdings (mNAV of 0.988).
• Bitcoin Correction: BTC's decline from >$126,000 to ~$88,000 pressures the leverage strategy.
• Aggressive Accumulation: Additional $1 billion Bitcoin purchase increases leverage.
• Financial Buffer: $1.44 billion reserve established for dividends and debt obligations.

Outlook Hinges on Bitcoin and Banking Partnerships

As 2025 draws to a close, investor focus is shifting to two critical factors: stabilization in the Bitcoin market and strategic development of the treasury business. Strategy Inc is reportedly in discussions with major U.S. banks, including BNY Mellon and Wells Fargo, regarding potential partnerships for Bitcoin management services starting in 2026. Such collaborations could solidify its profile as an institutional crypto custodian and open new revenue streams.

Analyst opinions remain divided. Citigroup maintains a "Buy" rating with a $325 price target, suggesting the recent sell-off may be overdone. Conversely, the prevailing technical indicators and the new valuation discount advocate for a more cautious stance in the near term.

In the short term, the stock's trajectory will likely be dictated by the interplay of Bitcoin's price trend, the interest rate environment, and progress in bank negotiations. The longer-term test throughout 2026 will be whether the hybrid model of software and crypto treasury can prove its operational and financial resilience.