Key Points:
Strategy acquired 21,021 BTC at an average price of $117,256, spending over $2.46 billion in its second-largest purchase of 2025
The firm’s total Bitcoin holdings now stand at 628,790 BTC, representing approximately 3% of the entire circulating supply
Funding for the acquisition came from a $2.52 billion capital raise via issuance of preferred perpetual stock named Stretch (STRC), far exceeding the initial $500 million target
Strategy now has four distinct preferred stock vehicles—STRK, STRF, STRD, and STRC—each with unique dividend structures and conversion rights into common shares
At-the-market (ATM) share offerings have increased equity supply, leading to dilution and a declining BTC-per-share metric
Modified Net Asset Value (mNAV), a key investor metric, has trended downward since peaking at 3.89x in November 2024
Analyst Willy Woo suggests the dilution may be a strategic move ahead of a potential market cycle peak
Despite short-term underperformance, MSTR remains up 31% year-to-date compared to BTC’s 26% gain
Recent data shows BTC outperformed MSTR by 8% in July, raising questions about the stock’s leverage efficiency
A Calculated Surge in Bitcoin Accumulation
In a move that has reignited debate across financial and crypto circles, Strategy has executed one of its most aggressive Bitcoin acquisitions of the year. The company added 21,021 BTC to its balance sheet at an average cost of $117,256 per coin, deploying over $2.46 billion in fresh capital. This acquisition marks the second-largest single-period purchase in 2025 and underscores the firm’s unwavering commitment to Bitcoin as a core treasury asset. Timing played a crucial role—the entry was made during a brief dip below $117,000, allowing Strategy to capitalize on a momentary softening in price. This precision in execution reflects a long-standing strategy of buying weakness, a tactic that has defined its approach since its early days as MicroStrategy.
The implications of this purchase extend beyond volume. With this addition, Strategy now holds 628,790 BTC, a stash so vast it accounts for nearly 3% of all Bitcoin ever mined. To contextualize, this exceeds the reserves of most nation-states and positions the company as one of the largest non-miner, non-exchange holders of the asset. The scale of ownership is no longer just a corporate finance decision—it is a macroeconomic signal. Each purchase influences market perception, alters supply dynamics, and reinforces the narrative of Bitcoin as a legitimate reserve asset. But this latest move was not funded through cash reserves or debt. Instead, it relied on a novel financial engineering mechanism that has drawn both admiration and skepticism.
Financial Architecture Behind the Bitcoin Bet
The capital for this acquisition came from a $2.52 billion raise through the issuance of Stretch (STRC), a new class of perpetual preferred stock. Originally targeting $500 million, Strategy expanded the offering more than fivefold, a testament to investor appetite for exposure to Bitcoin through equity vehicles. This success highlights a shift in how institutional capital engages with digital assets—not by buying BTC directly, but by investing in companies that do so at scale. The STRC offering is part of a broader suite of financial instruments the firm now employs, including Strike (STRK), Strife (STRF), and Stride (STRD). Each carries distinct dividend yields and conversion terms into the company’s common stock, MSTR, creating a layered capital structure designed for maximum flexibility.
These instruments function as hybrid securities—offering income like bonds while retaining equity-like conversion potential. They allow Strategy to raise capital without immediate dilution of common shares, at least on the surface. However, because these preferred shares can convert into MSTR under certain conditions, they represent latent equity supply. When combined with ongoing at-the-market (ATM) sales of common stock, the cumulative effect is an expanding share count. This expansion directly impacts a critical metric for investors: Bitcoin per share. As more shares enter circulation, the amount of BTC attributed to each share diminishes, reducing the perceived value of holding MSTR relative to holding BTC outright.
The Erosion of mNAV and Its Market Implications
One of the most closely watched indicators for MSTR investors is the modified Net Asset Value (mNAV), which estimates the value of the company’s Bitcoin holdings per share, adjusted for debt and other liabilities. In late 2024, mNAV peaked at 3.89x, signaling strong confidence and a premium valuation. Since then, it has entered a steady decline. This downward trajectory is not due to falling Bitcoin prices, but rather to the increasing denominator in the BTC-per-share calculation—more shares, same BTC. While the firm continues to add Bitcoin, it is doing so at a rate outpaced by share issuance, leading to a net dilution effect.
This structural shift has not gone unnoticed. Prominent analyst Willy Woo has suggested that the ongoing dilution may not be an unintended consequence, but a deliberate strategy. His thesis posits that Strategy is intentionally lowering mNAV in anticipation of a market cycle peak. By reducing the premium embedded in the stock, the company may be positioning itself to avoid a sharp correction when broader sentiment turns. If true, this would represent a sophisticated form of risk management—sacrificing short-term shareholder value to preserve long-term stability. It also implies a level of market timing awareness that challenges the narrative of Strategy as a purely passive, buy-and-hold entity.
Diverging Paths: MSTR vs. Direct Bitcoin Exposure
The growing disconnect between MSTR’s performance and Bitcoin’s price action has become increasingly evident. In July alone, Bitcoin outperformed the stock by 8%, a gap that has raised questions about the efficiency of using MSTR as a proxy for BTC exposure. Historically, MSTR traded at a significant premium to its underlying Bitcoin value, driven by leverage, corporate narrative, and speculative enthusiasm. But as mNAV declines and dilution accelerates, that premium is eroding. Some investors now argue that direct ownership of Bitcoin or exposure through low-cost ETFs like IBIT offers a cleaner, more transparent alternative.
Yet the broader year-to-date picture remains favorable for MSTR. The stock is up 31% so far this year, outpacing Bitcoin’s 26% gain. This outperformance reflects not just Bitcoin’s price movement, but also market confidence in the company’s strategic direction and its ability to execute large-scale acquisitions. Analysts like Jeff Walton argue that critics focusing on dilution are overlooking the larger transformation. In his view, Strategy has evolved beyond a traditional corporation into a quasi-sovereign entity, wielding financial power comparable to small nations. With $74 billion in Bitcoin assets under management, its balance sheet strength grants it unparalleled resilience in volatile markets.
Conclusion: A Bold Experiment in Corporate Financial Evolution
Strategy’s latest Bitcoin acquisition is more than a treasury decision—it is a statement of intent. By leveraging a complex web of preferred securities and ATM offerings, the company has redefined how a public firm can scale its exposure to a digital asset. The result is a financial model that blends aggressive accumulation with sophisticated capital structuring, enabling rapid growth while managing liquidity constraints. However, this model comes with trade-offs. Share dilution, declining mNAV, and widening performance gaps with BTC itself are real concerns that challenge the sustainability of the current approach.
The debate around Strategy is no longer just about Bitcoin. It is about the future of corporate finance, shareholder value, and the role of public companies in the digital asset era. Whether this strategy proves prescient or perilous may depend on the broader market cycle. If Bitcoin continues to rise, the dilution may be absorbed. If a downturn arrives, the reduced mNAV could act as a buffer—or expose structural vulnerabilities. For now, Strategy stands as both a pioneer and a paradox: a company whose success is tied to an asset it does not fully represent, growing in power even as its per-share value weakens. The experiment continues, and the world is watching.
