Strategy Stock Hits Five-Month Low as Bitcoin Outperforms Treasuries

Strategy, once the poster child of corporate Bitcoin adoption, is facing renewed investor skepticism as its stock price lags far behind the performance of the cryptocurrency it helped popularize as a treasury asset. 

Top 10 largest BTC holders (Source: Bitcoin Treasuries)

The company’s slide comes amid growing concerns that the Bitcoin treasury play may be losing its shine.

Bitcoin Outpaces Its Corporate Proxies

Earlier this year, investors piled into Bitcoin treasury stocks, betting they could outperform the crypto itself. That trade has now flipped. While Bitcoin has retreated about 8% from its record above $124,000 to around $114,000, corporate holders like Strategy and Tokyo-listed Metaplanet have fared far worse.

Strategy’s shares have plunged to roughly $323, their lowest level in nearly five months and well off July’s $500-plus highs. The share price has since recovered to around $326, data from Google Finance shows.

Strategy share price (Source: Google Finance)

Metaplanet’s stock, meanwhile, has tumbled more than 60% since its June peak, erasing the momentum it built after unveiling a massive Bitcoin purchase program.

A Crumbling Premium Model

The decline poses a threat to Strategy’s signature model, which relies on shareholders valuing its stock at a premium to the underlying Bitcoin it holds. That “flywheel” allowed the company, under co-founder Michael Saylor, to issue stock at elevated prices and reinvest the proceeds into more Bitcoin.

With shares now converging toward the value of its holdings, the model risks stalling. 

“We’re starting to see digital asset company stock prices diverge from the underlying crypto prices, which is making investors question whether they are a worthwhile investment,” said former Goldman Sachs analyst Dom Kwok.

Ikigai Asset Management CIO Travis Kling was even more blunt, telling Bloomberg: “The whole setup feels like the last gasp of a cycle that couldn’t come up with anything better than this silliness.”

Wider Sector Strain

The pain is not limited to Strategy. As many as one in three Bitcoin treasuries now trade below the value of their holdings, according to recent reports. Analysts warn this could trigger forced sales of coins to cover debt, further straining the market.

Other firms are already showing cracks. Sequans Communications, another Bitcoin-exposed company, recently resorted to a reverse split to avoid delisting — a sign that market pressures are spreading across the sector.

Metaplanet’s Ambitious Bet Falters

Metaplanet, which rebranded itself into Asia’s answer to Strategy in 2024, has also seen its stock battered. The company announced plans to raise $5.4 billion this year to target 210,000 Bitcoin by 2027 — roughly one percent of the asset’s maximum supply. Shares initially soared on the bold move, but they now hover near $4.40, a four-month low.

The drop highlights the risks of overreliance on equity issuance. “Once you are trading at net asset value, shareholder dilution is no longer strategic,” warned Matthew Sigel, VanEck’s head of digital assets. “It’s erosion.”

Outlook for Strategy

For Strategy, the slump is more than a price setback — it challenges the very mechanics of its Bitcoin accumulation strategy. If investor enthusiasm for Bitcoin treasury stocks continues to wane, the company could find itself constrained, with fewer options to grow its holdings and maintain its status as the world’s leading corporate Bitcoin holder.

The divergence between Bitcoin and its corporate proxies marks a pivotal moment for the sector. Whether Strategy and its peers can adapt will determine if Bitcoin treasuries remain a compelling play or a cautionary tale.