Original Title: In Q2 Earnings, MSTR Surges, and Coinbase Stumbles. But What's Next?
Host: Steven Ehrlich, Chief Writer at Unchained
Guest: Lance Vitanza, Managing Director and Head of Equity Research at TD Cowen;
Podcast Date: August 2, 2025
Compiled & Translated by: Fairy, ChainCatcher
Editor's Note:
On July 31, Strategy announced its financial results for the second quarter of 2025, with net income reaching a historic high of $10 billion and earnings per share reaching $32.60.
In this dialogue, host Steven Ehrlich and Lance Vitanza, Head of Equity Research at TD Cowen, delved deep into the key points behind the earnings report, covering Bitcoin holding strategies, capital structure adjustments, financing tool choices, and how key financial metrics (such as Bitcoin Yield and Bitcoin per share) reveal their growth potential.
Lance interprets Strategy's leading position in the wave of Bitcoin financialization from a research perspective, as well as the potential 'demonstration effect' it may have on the crypto treasury track.
The following is the dialogue content compiled and organized by ChainCatcher.
Steven: What do you think is the highlight worth paying attention to in Strategy's second quarter earnings report?
Lance: For me, the key point is that the company has raised its full-year Bitcoin yield expectation from 25% to 30%. Although I think this target is still conservative, it has already doubled the expectation at the beginning of the year.
In the companies I track, it is rare to see a company complete the revised full-year target just seven months in and then raise it again. This indicates that its performance is very strong.
Steven: Why do you think they are able to achieve this?
Lance: First of all, the current regulatory environment is very favorable for Strategy and other Bitcoin treasury companies.
We see multiple positive signals: FASB modified accounting rules, and the White House also stated in its report that it will retain favorable tax treatment for unrealized gains on crypto assets. This is one of the most favorable policy backgrounds, which is also reflected in the strong price trend of Bitcoin.
Of course, this is also thanks to the strategy of Strategy itself. They are not only aggressive but also very creative and execution-driven. They accurately target different capital markets, such as:
Raised about $8.5 billion in the convertible bond market, of which $2 billion was issued this year;
Successfully launched the Strike aimed at the preferred stock market;
Then entered the high-rated preferred stock market and issued Strife;
Recently launched a new product aimed at retail investors to attract more funds.
Steven: They reported $10 billion in profit, but some question whether this is just an 'inflated performance' after changing accounting rules. What would the results be if they had been measuring by market value since 2020?
Lance: We have actually done back-testing calculations, and the results are clear: the asset curve is always upward.
Even if the 2024 earnings report is adjusted according to the new rules, there will still be significant growth. As of yesterday, the company reported that Bitcoin-related earnings have exceeded $13 billion, which does not include the gains from issuing additional shares; it is entirely earned through existing Bitcoin holdings, meaning there is no dilution of shareholder equity.
In comparison, the full year of 2024 is $12 billion, and now just in the first 7 months of 2025 has exceeded this figure. More importantly, their new target is to reach $20 billion for the year, which is equivalent to doubling.
So, even without considering the changes in accounting rules, this company has indeed achieved very strong growth. The new accounting standards magnified the results but are not the only reason for the growth.
Steven: Strategy seems to be gradually exiting the convertible bond market now. Although their balance sheet is relatively healthy, they now seem to intend to actively repurchase or clear debt. What do you think? What does this mean for their future financing strategy?
Lance: I think this is a positive signal indicating that Strategy is upgrading their capital market strategy.
In the past, they primarily financed through convertible bonds, but this market is mainly for arbitrage, where institutions buy bonds while shorting stocks to hedge risks.
But now, as the company grows, they have the ability to turn to the preferred stock market. In contrast, preferred shares provide more efficient capital appreciation, more favorable terms, and stronger leverage.
This also provides a reference for other Bitcoin treasury companies (PBTC). Many of these companies will also start with convertible bonds in the early stages, but the ideal path should be to gradually shift to more stable, credit-advantaged financing channels like Strategy.
Steven: You mentioned that convertible bonds are currently a suitable financing method for many crypto treasury companies. Can you elaborate? What signs indicate that they are ready to enter the preferred stock market? If these companies still have significant debt pressure, what risks should investors pay attention to?
Lance: First of all, to enter the preferred stock market, a company must be large enough.
Taking Strategy as an example, they only started to get involved in Bitcoin in the fall of 2020, and it has only been four years since then, while the first issuance of preferred shares was in January of this year. At that time, their market value and Bitcoin position were already quite substantial, and their stock price performance was also very strong.
So, the good news is that if convertible bonds are operated properly, they can indeed bring considerable appreciation. For many PBTCs, starting with convertible bonds is a reasonable path, and the key is execution. Whether the new batch of companies can replicate this success still needs time to observe.
This is a track with sufficient market space. Michael Saylor himself has been actively supporting the development of other PBTCs; this is not competition, but a win-win.
The more PBTCs there are, the more they can attract funds into the entire track, and it will also push Bitcoin deeper into the global financial system. This is a benefit for Strategy, not a threat.
Steven: There is a new commitment in the earnings report: they will not issue common stock when MNAV (Market Net Asset Value) is below 1. Do you think this practice can be promoted among other crypto treasury companies? What do you think of such a commitment?
Lance: For Strategy, this is actually not a completely new approach. They have never issued common stock when the MNAV was below 1, and we never expected them to do so.
The real new commitment is that if the MNAV does not exceed 2.5 (i.e., a premium of over 150%), they will not issue additional common stock, unless it is to pay dividends, interest, or for daily operating expenses. In other words, even if the MNAV reaches 2, they will not issue shares to buy Bitcoin.
Previously, they had issued a large amount of common stock when the MNAV was below 2.5 (even below 2), so this is indeed a significant shift.
For shareholders, this is indeed more reassuring. But it also brings new problems: if the current MNAV is only around 1.8, they will have to rely on other financing methods.
Considering they are no longer inclined to use convertible bonds, preferred shares will become the main channel.
So far, their IPO performance has been very strong, but the response through ATM (at-the-market issuance) has been mediocre. However, this may change due to the newly launched floating rate preferred stock STRC.
This new stock had a very strong trading volume in its first week on Nasdaq, and it is possible to expand issuance in the future through the ATM method, which was officially announced in their earnings report yesterday.
Steven: They are now frequently mentioning two metrics: 'Bitcoin per share' and 'Bitcoin yield'. Can you briefly explain the difference between these two and why the latter is more important?
Lance: In fact, these two metrics are closely related. The calculation of Bitcoin yield itself cannot be separated from 'the amount of Bitcoin held per share'.
The research we published indicates that the underlying data for yields is actually the change in 'Bitcoin per share'. So I don't think 'Bitcoin per share' is a completely new concept; it's just that this time they made it more prominent.
Assuming that from the beginning of 2023 to now, the amount of Bitcoin held per share by the company has increased by about 130%. In other words, if you hold one share, the corresponding Bitcoin now is 2.3 times what it was back then, which is quite an astonishing growth.
As for the 'Bitcoin yield', for example, they are currently reporting 25%, meaning the number of Bitcoins per share has increased by 25% compared to the past.
Personally, I don't really care about 'what the specific earnings per share are'; I am more concerned about the growth rate of this number. So in comparison, I pay more attention to the 'Bitcoin yield' metric.
Steven: What do you think is Strategy's ultimate goal? Is it healthy for a company in the Bitcoin industry to hold such a large share while still in the 'early stage'?
Lance: Currently, Strategy holds about 630,000 Bitcoins, accounting for approximately 3% of the total Bitcoin supply (21 million). This ratio is calculated based on total supply and includes the 5% that is believed to be permanently lost.
From a more macro perspective, this company still has a lot of growth space in the future. But indeed, there will come a day when the Bitcoin they hold will reach a certain 'limit', and continuing to increase holdings may affect Bitcoin's broader financial applications.
No one can determine what this critical point will be. My view is that they have about ten more years to continue pushing their current strategy and increasing their holdings.
Our model predicts that by the end of 2027, they may hold about 4.3% of the total Bitcoin supply, an increase of about 1.3 percentage points from now. It is foreseeable that they still have stable growth space in the next few years.
Steven: Strategy raised its full-year target due to good execution of its Bitcoin strategy in the first six months. I saw that your report this morning also updated the model. Can you share your current forecast for the end of the year?
Lance: Our current forecast is to achieve a Bitcoin yield of 32.1% for the entire year.
This figure is 2.1 percentage points higher than the company's current official target, and we believe the company is very likely to raise the target again, possibly exceeding expectations. Frankly, I think our forecast of 32.1% has a greater likelihood of upside rather than downside.
Our method for calculating 'Bitcoin yield' is slightly different from theirs; we base it on the purchase cost rather than the market end price. So our data is more conservative and cannot be directly compared to the figures disclosed by the company.
As a reference, we predict that the company will achieve about $15.3 billion in Bitcoin yield this year, with approximately $16 billion in the next two years.
Different calculation methods yield a forecast range between $16 billion and $22 billion. We have chosen a more conservative approach, which we believe is more reasonable. But ultimately, there is no single correct answer for the final result.
