Strategy Inc. is confronting its most severe market downturn in nearly two years. The leading Bitcoin-focused company now sees its stock trading below its net asset value for the first time in 2024, representing a historic breakdown in investor confidence. This development raises fundamental questions about why the firm’s business model—which previously commanded substantial premiums over its underlying Bitcoin holdings—is faltering at this particular moment.
Market Skepticism Reaches Critical Level
The crucial turning point arrived on Friday when Strategy shares collapsed to $201.80, representing a staggering 60% decline from their November 2024 peak of $543. Most significantly, the market value to net asset value (mNAV) ratio dropped to 0.977x. This means investors are now paying less for the company’s equity than the theoretical value of its Bitcoin reserves after accounting for debt and preferred shares.
This threshold was last breached in January 2024, signaling a fundamental shift in market perception. Despite Strategy holding 641,692 Bitcoin valued at $61.9 billion, its market capitalization of approximately $73.8 billion barely exceeds this amount. The longstanding premium that investors willingly paid for exposure through the treasury model has effectively disappeared.
Bitcoin Collapse Triggers Widespread Selling
The panic intensified when Bitcoin prices fell below $95,000 on Friday. This triggered liquidations exceeding $1.3 billion in leveraged cryptocurrency positions, with Strategy absorbing the full impact. The extremely high correlation between MSTR and Bitcoin transformed into a nightmare scenario for shareholders.
Compounding the situation, social media speculation suggested Strategy had liquidated $1 billion worth of Bitcoin, supposedly reducing its holdings from 484,000 to 437,000 BTC. Executive Chairman Michael Saylor immediately refuted these claims, stating “There isn’t a shred of truth to this rumor.” The confusion apparently stemmed from internal wallet transfers that blockchain analysts misinterpreted as sales transactions.
Should investors sell immediately? Or is it worth buying Strategy?
Leadership Responds with Aggressive Buying Plan
Saylor adopted an offensive stance during a CNBC interview, announcing “We’re buying Bitcoin, and we’ll report our next purchases on Monday morning.” He indicated the company is accelerating its acquisition strategy to capitalize on the current market sell-off.
Nevertheless, market participants remained unconvinced. Additional pressure emerged when Vice President and General Counsel Shao Wei-Ming sold 10,668 shares on November 10th and 11th at prices between $234.75 and $249.56, realizing approximately $2.58 million. Although these transactions occurred under a predetermined trading plan connected to Shao’s retirement at year-end, the timing attracted significant scrutiny.
Core Business Model Faces Scrutiny
Bitget CEO Gracy Chen highlighted the central issue: the premium’s collapse undermines the fundamental rationale for Bitcoin treasury companies. If investors no longer pay extra for exposure, what advantage remains over direct Bitcoin ownership?
From a technical perspective, Strategy shares are approaching a critical support level around $138, coinciding with the 200-week moving average. Unless Bitcoin stabilizes soon, further downward pressure appears likely. The coming weeks will determine whether Saylor’s aggressive repurchasing strategy can restore market confidence or whether the era of premium-priced Bitcoin proxy investments has conclusively ended.
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