Bitcoin’s surge in 2025 has not lifted all boats. While the cryptocurrency smashed through new records this year, Strategy Inc.—the company once known as MicroStrategy—has struggled to convince investors it still deserves to be the stock market’s premier proxy for Bitcoin.
Bitcoin Soars, Strategy Stumbles
On August 18, Bitcoin briefly topped $124,000 before settling near $115,000, marking one of the strongest rallies in its history. In the past, such momentum would have sent Strategy’s stock soaring. Instead, shares slipped nearly 9% in mid-August, falling from $400 to $366.
That drop highlights a deeper disconnect. Strategy still holds around 629,000 BTC, worth more than $72 billion, yet its stock trades nearly one-third below its 52-week high. Once valued at multiples above its Bitcoin reserves, the company now struggles to maintain even a modest premium.
The Financing Engine Under Pressure
Much of Strategy’s growth has relied on aggressive fundraising—selling stock and issuing convertible debt to buy more Bitcoin. Investors once embraced the model, believing dilution was justified by leveraged gains. But with the stock underperforming Bitcoin itself, patience is wearing thin.
Cheap funding opportunities from past years are gone. Rising interest rates mean new debt is costlier, while preferred equity, now a tool of choice, adds fixed obligations. Shareholders have grown wary after years of issuance that increased the share count by more than 40%.
The ETF Effect
What has really eroded Strategy’s appeal is not just financing strain but the rise of alternatives. Since 2024, spot Bitcoin ETFs have transformed the investment landscape. With firms like BlackRock attracting billions in assets, investors can now buy Bitcoin exposure directly—regulated, liquid, and cheap.
This shift has collapsed the premium once attached to Strategy. No longer do equity investors need a corporate balance sheet as a proxy. They can hold Bitcoin outright or own ETFs that don’t dilute shareholder value.
A Fight for Relevance
Strategy’s shares now trade in a tight range, with $360 emerging as a key pressure point. Hedge funds have replaced long-term institutions as dominant traders, signaling a change in market character. Other Bitcoin treasury plays, such as Japan’s Metaplanet, show similar strain, suggesting this is an industry-wide problem.
Analysts remain split. Some argue that if Bitcoin keeps climbing, Strategy will eventually catch up, with price targets north of $550 still possible. Others see its role fading in a world where Bitcoin exposure has never been easier or cheaper.
The central question: Can Strategy redefine its purpose beyond being a leveraged bet on Bitcoin? With direct ownership and ETFs now mainstream, the company must find a way to justify its premium—or risk becoming irrelevant despite holding the largest corporate Bitcoin treasury in the world.
