Strategy (MSTR) shares have plummeted below $100: what is behind the collapse and why it is a warning sign
Shares of Strategy (MSTR), the largest corporate bitcoin holder led by Michael Saylor, have fallen below the psychologically important $100 mark for the first time since March 2024. This drop has dealt a serious blow to one of Wall Street's most popular stocks directly tied to cryptocurrency.
The collapse of MSTR quotes occurred against the backdrop of bitcoin's price falling to the $61,000 zone. This synchronicity once again underscores how closely Strategy's value is tied to the dynamics of the first cryptocurrency, which now dominates its asset structure.
Why is MSTR falling harder than bitcoin?
It is important to understand: MSTR is not just a proxy for bitcoin. It is a leveraged proxy. The company's balance sheet holds 847,363 BTC — the largest corporate reserve in the world. When bitcoin was rising, MSTR often outperformed the market. Now the situation has reversed.
The decline in bitcoin has triggered a chain reaction:
- The value of Strategy's bitcoin reserves is decreasing.
- Investor confidence in the company's financing model is waning.
- The premium to net asset value (NAV) is compressing.
- Financial risks are becoming more apparent.
As a result, MSTR often falls more sharply than bitcoin itself. This is a classic feedback effect for an instrument with high debt leverage.
The main threat: the capital raising mechanism is breaking down
Even the decline in bitcoin does not fully explain the scale of the collapse. The issue with the preferred instrument STRC, which helped the company buy bitcoins, has come to the forefront. By design, its price should stay near the par value of $100, but it has recently broken below this level.
Against this backdrop, borrowing costs for Strategy are only rising, and attracting new money is becoming increasingly difficult. For investors, this is a critical moment: Strategy's bitcoin accumulation formula entirely depends on effective access to capital. Once this source weakens, expectations for the company's growth also decline.
The first bitcoin sale shook confidence
Pressure intensified after Strategy disclosed the sale of 32 bitcoins to fund payments on preferred shares. The transaction amount was insignificant compared to total reserves, but the symbolism of this move was enormous.
For many years, Strategy built its reputation on the almost inviolable idea of "never selling bitcoin." Even a minor sale called this principle into question and drew attention to the company's liquidity.
What's next?
Currently, investors are watching two key levels: whether bitcoin can hold in the $60,000–$61,000 range, and whether confidence in Strategy's capital raising strategy will remain.
If bitcoin holds firm, MSTR could show a sharp rise due to its leverage. But if pressure on bitcoin persists and financing issues remain unresolved, the price fixing below $100 could prove to be more than just a technical event.
My expert opinion: The current situation is not just a correction. It is a stress test for Strategy's entire business model. If the company cannot quickly restore market confidence in its capital raising mechanism, we may see a further acceleration of the decline that surpasses even bitcoin's dynamics. Investors should be extremely cautious.