Legal challenges also loom for the firm, as the Rosen Law Firm probes possible securities class action claims which critics say could push Strategy into bankruptcy.
- Strategy’s mNAV ratio dipped to 0.99, below 1 for the first time in its history, a milestone analyst Axel Adler Jr. said breaks the premium that powered its Bitcoin-buying model.
- A reading below 1 means that the market is not paying a premium for Strategy’s shares over the Bitcoin (BTC) it holds on its balance sheet, making it harder for the firm to raise capital and buy more BTC.
- Strategy has 847,363 BTC worth about $50.7 billion but only $1.4 billion in cash versus $1.71 billion in annual dividends, equating to about 9.8 months of coverage unless Michael Saylor sells Bitcoin he’s pledged to hold, according to Adler’s numbers.
- Grayscale’s Zach Pandl said he expects Strategy to increase its STRC dividend by around 50 basis points, but would like to see it sell $3 billion or more in Bitcoin to meet its cash demands.
Strategy (MSTR) saw its market value slip below the worth of its Bitcoin (BTC) holdings for the first time ever, a milestone analysts said breaks the premium that powered its Bitcoin-buying model.
On-chain analyst Axel Adler Jr. noted the change in his latest “Weekly Engine” note, which put the company’s Market-to-Net Asset Value (mNAV) at 0.99. A reading below 1 means that the market is not prepared to pay more for Strategy’s shares than Bitcoin on its balance sheet.
Adler's figures showed that Strategy held 847,363 BTC, a reserve worth about $50.7 billion, against about $1.4 billion in USD reserves and $1.71 billion in annual dividend obligations. That left the company with an estimated 9.8 months of dividend coverage in cash, versus 29.6 years if measured against its Bitcoin holdings. The firm, Adler noted, had $6.75 billion of debt at 11% net leverage and preferred securities totalling $15.5 billion.
The split in coverage was the central tension for the company, said Adler. If Michael Saylor, who has repeatedly vowed not to sell the Bitcoin he holds, does sell his Bitcoin, there's under 10 months of runway, and the nearly 30 years of dividend coverage only holds if he does not, said the CryptoQuant analyst. Adler sees Strategy trading about 78% below its high.
The Broader Weakness In Market
Adler framed Strategy’s strain within a broader stressed market. His weekly model was 100% cash for a fourth week in a row, with Bitcoin finishing the week near $59,900, down about 6.4% in a “panic selling” phase that continues, he said.
He pointed to a sharp deterioration in spot Bitcoin ETF flows, which had turned to a weekly outflow of around 29,500 BTC, coupled with an increase in coins moving onto exchanges and a falling share of supply held at a profit, now below half.
But he flagged long-term holders who were not selling into the weakness, which was a stabilising factor. Strategy is the main corporate stand-in for Bitcoin in the market, Adler framed, tying its weakness directly to the broader slump.
MSTR has been lower than the orange BTC line in each major drawdown cycle (mid-2021, the 2022 bear, and the current 2026 slide). In the 2022 trough, both ran toward the -70% to -80% zone, with MSTR tanking deeper. On the current drawdown, both have rolled over again as BTC has fallen back toward the $60K area, with MSTR's drawdown again steeper than Bitcoin's.
What's Next For Strategy
Grayscale Head of Research Zach Pandl said on X that the expectation is that Strategy would increase the dividend on its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) preferred shares by roughly 50 basis points, adding roughly $100 million in liabilities over a two-year period, which he said probably wouldn’t raise confidence. Pandl added he would like Strategy to sell at least $3 billion in Bitcoin to cover nearly all of its cash obligations over the next two years, except for one of its convertible notes. He said such a move would likely restore confidence in the market.
Strategy is also facing legal scrutiny. The Rosen Law Firm announced it is investigating potential securities class action claims on behalf of Strategy investors to determine whether the company may have issued materially misleading business information to the investing public. The firm has not sought to sue, and the probe is still at the investigation stage. A longtime critic, Peter Schiff, has argued separately that falling Bitcoin prices could push the company into bankruptcy.
MSTR's stock closed down by over 3% on Friday, but was in the green in the after-hours. On Stocktwits, retail sentiment around MSTR remained in the ‘bullish’ zone over the past day, while chatter stayed at ‘extremely high’ levels.
Read also: Grayscale Pushes Back On The 80% Crash Calls — Says Bitcoin's Bottom Hinges On The Fed And CLARITY Act
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