Strategy Inc, the world’s largest corporate holder of Bitcoin, has entered a situation many believed would never happen. For the first time, the company’s market cap has dropped below the value of its Bitcoin holdings.
The firm owns 650,000 Bitcoin, currently valued at around $55.9 billion. Yet investors have pushed Strategy’s market capitalisation down to about $45.7 billion, meaning Wall Street is effectively valuing the underlying business at negative $10.2 billion.
Why is the stock sliding steeply?
The slide has been steep. The stock plunged 12% on Monday and has now fallen 57% since October 6. Strategy still holds a massive Bitcoin stash worth more than the entire company, even after subtracting its $8.2 billion debt. On a net basis, its Bitcoin is worth almost $46.8 billion, higher than its current valuation on the market.
CEO on selling Bitcoin
Warning signs have been emerging for months. The company recently created a $1.44 billion emergency cash reserve to support dividend payments.
For the first time in five years, the leadership openly admitted that selling Bitcoin could happen
As reported by CEO Phong Le told in an interview, “Now, as we are looking at Bitcoin winter, as we see our mNAV compressing, my hope is our mNAV doesn’t go below one. But if we do and we didn’t have other access to capital, we would sell Bitcoin.”
The company’s founder Michael Saylor has always insisted Bitcoin would never be sold. An investor presentation on Monday confirmed the company will sell BTC if mNAV (Market Net Asset Value) the ratio of Bitcoin value to market value falls below 1.
Bitcoin Outlook – What experts predict
The turmoil has already hit related investments. Leveraged exchange-traded funds that track Strategy, MSTX and MSTU (both are leveraged exchange-traded funds) have lost over 80% of their value, Bloomberg reported. Along with a third ETF, MSTP, they have shed $1.5 billion in the past month.
Patrick Horsman, CIO at BNB Plus, told Wall Street Journal, “I think we could see Bitcoin get all the way back to $60,000 … We don’t think the pain is over.”
In 44 days, MSCI will decide whether Strategy should remain in its global stock indices. A removal could lead $8.8 billion in forced selling by index funds, according to JPMorgan.
The company also has $7.8 billion in preferred stock, bringing total financial obligations to around $16 billion. This crisis is now about more than one company. Strategy controls just over 3% of the total Bitcoin supply. If it is forced to sell a meaningful chunk, it could create further panic.
Strategy’s Bitcoin-first strategy once made it a Wall Street sensation and a crypto icon. Now that strategy faces its hardest test yet. Investors point to a crucial milestone, January 15, 2026, MSCI’s decision deadline.
