Strategy’s Bitcoin Accumulation Faces Scrutiny from Market Analysts

Strategy US5949724083

Market analysts are questioning the valuation of Strategy Inc. as the company continues its aggressive acquisition of Bitcoin. This scrutiny comes despite the firm's latest purchase of 2,486 Bitcoin for approximately $168.4 million in the week ending February 16. The coins were acquired at an average price of $67,710 each.

With this recent transaction, Strategy's total holdings have reached 717,131 Bitcoin, representing a total value of roughly $54.5 billion. The company's average cost basis across its entire portfolio stands at about $76,000 per Bitcoin, meaning the latest buy was executed significantly below its historical average. Management appears to be leveraging periods of weakness in the cryptocurrency market for strategic accumulation.

The firm continues to fund these purchases through capital markets. Its net debt ratio is reported to be between 10% and 13%, and company statements indicate that existing cash reserves are sufficient to cover obligations for more than two years. Leadership has emphasized its capacity to endure prolonged market downturns without being forced to liquidate assets.

Analyst Downgrade Highlights Valuation Concerns

While maintaining an "Outperform" rating on the stock, Mizuho Securities has reduced its price target substantially. The analysts lowered their target from $403 to $320, a correction of over 20%. They cite a compression in valuation multiples as the cryptocurrency market matures. The premium at which Strategy's shares trade compared to the pure value of its underlying Bitcoin holdings has contracted.

Executive Chairman Michael Saylor addressed current market conditions on the social platform X this past Tuesday. He described the situation as a temporary "crypto winter" that would precede a "glorious summer," asserting that short-term price volatility is inconsequential to the firm's long-term strategic vision.

Approaching a New Milestone and Investor Metrics

Strategy is now approaching the threshold of 720,000 Bitcoin in its treasury. A key metric for investors remains the "Bitcoin Yield"—the ratio of newly acquired Bitcoin to outstanding shares. The critical question is whether this measure can continue to drive growth in a potentially less volatile crypto environment.

The stock closed the prior week at $133.88, trading above a technically significant support level identified at $125.