As Bitcoin strengthens, Strategy faces a test of relevance

What explains the growing disconnect between Bitcoin’s strength in 2025 and Strategy’s lagging stock, once the market’s favorite equity proxy for the asset?

Bitcoin sets records while Strategy shares stumble

Bitcoin (BTC) has pushed into record territory in 2025, briefly crossing $124,000 before easing to around $115,000 by Aug. 18. 

Normally, such a rally would have lifted Strategy Inc, the company once known as MicroStrategy, whose identity and valuation have been closely tied to Bitcoin for years.

Since 2020, Strategy has positioned itself as the largest corporate holder of the asset. Its balance sheet includes about 629,000 BTC, worth around $72.5 billion at current market prices. 

For much of that time, investors treated the stock as a way to gain amplified exposure to Bitcoin without holding it directly. When Bitcoin rose, MSTR often rose faster.

That relationship looks weaker in 2025. During the week when Bitcoin set new highs, Strategy’s shares fell from about $400 on Aug. 11 to $366 by Aug. 15, a decline of nearly 9%. 

The stock is also trading roughly one third below its 52-week peak of $543, despite the size of its reserves.

Valuation highlights the disconnect. Strategy’s market cap stands near $104 billion, which works out to a net asset value multiple of about 1.4 times its Bitcoin holdings. 

In earlier cycles, that ratio was much higher. Throughout 2024, the premium often stretched between 2.5 and 3 times, showing how much investors once valued the stock as a proxy. Today, the premium has compressed toward parity.

The change is visible in recent returns. Between February and August 2025, a $10,000 investment in Bitcoin grew about 22%, while the same investment in Strategy gained less than 9%. 

Earlier in the year, the pattern was reversed, with Strategy shares delivering more than 30% while Bitcoin advanced about 15%. Since June, Bitcoin’s climb has continued, while the stock has slipped back, losing the amplification effect that once defined it.

Funding model shows signs of strain

The weakness in Strategy’s stock is not just about charts. It reflects strain in the financing structure that has allowed the company to keep building its Bitcoin reserve. 

Since 2020, the firm has relied heavily on equity sales and convertible debt, raising billions through repeated issuances. The model worked while investors believed that dilution was offset by the promise of leveraged gains from Bitcoin.

That confidence has started to fade. The company’s recent update to its equity issuance guidelines triggered a sell-off, signaling that shareholders are less willing to accept more dilution when the stock is already lagging behind Bitcoin itself.

Earlier fundraising rounds benefited from unusually favorable conditions. In 2021 and again in 2023, Strategy issued convertible notes with coupons as low as 0.75% to 1.5%, locking in billions at terms that looked cheap even before Bitcoin’s appreciation was considered. 

Those opportunities are harder to come by now. With higher interest rates and a thinner stock premium, the company has shifted toward preferred shares as a financing tool. 

Preferred equity avoids immediate dilution but comes with fixed payouts that narrow flexibility in the future.

Share issuance has also become more of a reputational burden. Over the past three years, the number of outstanding shares has risen by more than 40%. 

That pace was tolerated when MSTR consistently outperformed Bitcoin. Today, with the stock trailing the underlying asset, the trade-off looks less compelling.

The result is a financial engine that no longer spins as smoothly as before. Strategy still controls the largest corporate Bitcoin treasury in the world, yet the mechanics that once helped it expand that position are now under pressure.

Why investors no longer pay a premium for Strategy

When Michael Saylor first turned his company toward Bitcoin in 2020, owning MSTR shares offered a straightforward way for equity investors to gain exposure without buying the asset directly. 

Institutional products were scarce, custody solutions were less mature, and buying Bitcoin on retail platforms carried frictions that justified the premium investors attached to the stock.

The environment in 2025 looks very different. Spot Bitcoin exchange-traded funds have gathered hundreds of billions of dollars in assets since approvals began in early 2024. 

BlackRock’s fund alone has crossed $89 billion under management, with other issuers adding substantial inflows. 

These products give investors liquid, regulated, and cost-efficient exposure to Bitcoin, often with annual management fees below 0.25%. For institutions, that combination of safety, simplicity, and low cost has proved compelling.

Retail channels have also widened. Coinbase, Robinhood, and even traditional brokerages now allow users to buy fractions of Bitcoin directly within the same apps used for equities and ETFs. 

The ease of purchasing digital assets in small amounts has reduced the need for a corporate proxy.

That shift explains why the premium once attached to Strategy has compressed. Investors no longer need to rely on a software company’s balance sheet to hold Bitcoin. They can buy it outright or use regulated ETFs that avoid dilution and carry minimal fees.

$360 emerges as the market’s pressure point

Strategy’s stock is increasingly being defined by psychology rather than just balance sheet math. The share price has hovered in one of its narrowest ranges in years, with $360 emerging as the level investors are watching most closely. 

The character of ownership has also changed. Vanguard, once the anchor shareholder, reduced its position last quarter. In its place, hedge funds have taken on a larger role in daily trading. 

Other treasury-style plays show the same stress. In Japan, Metaplanet has dropped more than a third over the same period, pointing to a broader loss of investor appetite for listed corporate holdings of Bitcoin.

What has drained the appeal is a collapse in volatility. Investors who once paid above intrinsic value to chase amplified gains now see less reason to do so. 

Capital is being redirected toward areas that feel newer and less crowded, such as Ethereum-linked reserves and crypto IPOs.

The open question is whether Strategy can remain relevant in this new order. A firm support at $360 might provide a tactical entry point, but the longer-term story rests on whether treasury-style companies can regain their role as amplified proxies for Bitcoin. 

Analysts remain divided on what comes next. Some still see upside, with price targets in the $550 to $570 range suggesting more than 50% potential gains from current levels. 

Much will depend on how Strategy adapts. A strong Bitcoin market can provide support, but investor confidence will rest on whether the company balances reserve growth with shareholder value.

The role Strategy once played as the de facto proxy for Bitcoin is no longer unique. User access to ETFs and direct ownership means that investors have simpler choices today. 

Strategy’s challenge is to redefine its appeal in this new environment. If it succeeds, the company can remain a prominent, listed vehicle tied to the largest corporate Bitcoin treasury in the world. If it falls short, its once-central role as a bridge to Bitcoin may continue to fade.