Original Title: In Q2 Earnings, MSTR Surges, and Coinbase Stumbles. But What’s Next?
Host: Steven Ehrlich, Chief Writer of Unchained
Guest: Lance Vitanza, Managing Director and Head of Equity Research at TD Cowen;
Podcast Date: August 2, 2025
Compiled & Edited by: Fairy, ChainCatcher
Editor’s Note:
On July 31, Strategy announced its financial results for the second quarter of 2025, with net income reaching a record high of 10 billion dollars and earnings per share of 32.60 dollars.
In this episode of the dialogue, host Steven Ehrlich delves into the key highlights behind the financial report with Lance Vitanza, head of equity research at TD Cowen, covering Bitcoin holding strategies, capital structure adjustments, financing tool selections, and how key financial indicators (such as Bitcoin Yield and per-share Bitcoin) reveal its growth potential.
Lance interprets the leading position of Strategy in the wave of Bitcoin financialization from a research perspective, as well as its potential “demonstration effect” on the crypto treasury track.
The following is the dialogue content compiled and organized by ChainCatcher.
Steven**:**What do you think is the highlight worth paying attention to in Strategy’s Q2 financial report?
Lance: For me, the most critical thing is that the company has raised its full-year Bitcoin earnings forecast from 25% to 30%. While I think this target is still conservative, it is already double the initial expectation at the beginning of the year.
In the companies I track, it is rare to see any company complete its annual raised target ahead of schedule just seven months in, and then raise it again. This indicates that its performance is very strong.
Steven**:**Why do you think they can achieve that?
Lance: First of all, the current regulatory environment is very favorable for Strategy and other Bitcoin vault companies.
We are seeing multiple positive signals: the FASB has amended accounting rules, and the White House has also stated in its report that it will maintain favorable tax treatment for unrealized gains on crypto assets. This is one of the most favorable policy contexts, which is also reflected in the strong trend of Bitcoin prices.
Of course, credit also goes to the strategy itself of Strategy. They are not only aggressive but also very creative and execute well. They precisely penetrate different capital markets, such as:
- Raised approximately $8.5 billion in the convertible bond market, of which $2 billion was issued this year;
- Successfully launched Strike aimed at the preferred stock market;
- Subsequently, it entered the high-rated preferred stock market and issued Strife;
- Recently, a new product aimed at retail investors was launched to attract more funds.
Steven**: They announced a profit of 10 billion USD, but some question whether this is just an “inflated performance” after changing accounting rules? What would the results look like if they had been measuring by market value since 2020?**
Lance: We have actually conducted a backtest, and the results are very clear: the asset curve is always upward.
Even if we adjust the financial report for 2024 according to the new regulations, we will still see a significant increase. As of yesterday, the company reported that its bitcoin-related earnings have exceeded 13 billion dollars, not including the gains from stock issuance, which were entirely earned through existing bitcoin positions, meaning there has been no dilution of shareholder equity.
In comparison, the entire year of 2024 is $12 billion, and now in just the first 7 months of 2025, this figure has already been surpassed. More importantly, their new target is to reach $20 billion for the year, which is equivalent to doubling.
Therefore, even without considering the changes in accounting rules, this company has indeed achieved very strong growth. The new accounting standards amplified the results, but they are not the only reason for the growth.
Steven**: Strategy seems to be gradually exiting the convertible bond market. Although the balance sheet is relatively healthy****,**** they now seem to plan to proactively repurchase or clean up debt. What do you think? What does this mean for their future financing strategy?**
Lance: I think this is a positive sign that Strategy is upgrading their capital market strategy.
In the past, they primarily financed through convertible bonds, but this market was dominated by arbitrage, where institutions would buy bonds while shorting stocks to hedge against risks.
But now, as the company grows, they have the capability to turn to the preferred stock market. In contrast, preferred stocks offer more efficient capital appreciation, more favorable terms, and stronger leverage.
This also provides a reference for other Bitcoin vault companies (PBTC), many of which started with convertible bonds in their early stages, but the ideal path should be to gradually shift towards more stable and creditworthy financing channels like Strategy.
Steven: You mentioned that convertible bonds are currently a suitable financing method for many crypto vault companies. Can you elaborate on this? What signs indicate that they are ready to enter the preferred stock market? If these companies are still under significant debt pressure, what risks should investors pay attention to?
Lance: First, to enter the preferred stock market, a company must be large enough.
Take Strategy as an example; they only started to venture into Bitcoin in the autumn of 2020, and it has only been four years since then. Their first issuance of preferred shares was in January this year. At that time, both their market capitalization and Bitcoin positions were quite substantial, and their stock price performance was also very strong.
So, the good news is that convertible bonds, if operated properly, can indeed bring considerable appreciation. For many PBTCs, starting with convertible bonds is a reasonable path, and the key is execution. As for whether the new batch of companies can replicate this success, it will take time to observe.
This is a track with sufficient market space. Michael Saylor himself has been actively supporting the development of other PBTCs; this is not competition, but a win-win situation.
The more PBTC there is, the more it can attract more funds into the entire sector, which will also push Bitcoin deeper into the global financial system. This is a positive for Strategy, not a threat.
Steven: There is a new commitment in the financial report: ordinary shares will not be issued when MNAV (Market Net Asset Value) is below 1. Can this practice be promoted among other crypto vault companies? What do you think of such a commitment?
Lance: In terms of Strategy, this is actually not a brand new approach. They have never issued common stock when the MNAV was below 1 in the past, and we never expected them to do so.
The real new commitment is: MNAV will not issue common stock unless it exceeds 2.5 (i.e., a premium of over 150%), unless it is to pay dividends, interest, or for daily operating expenses. In other words, even if MNAV reaches 2, they will not issue shares to buy Bitcoin.
Previously, they had issued a large amount of common stock when the MNAV was below 2.5 (even below 2), so this time it is indeed a significant change.
For shareholders, this is indeed more reassuring. But it also brings new problems: if the current MNAV is only around 1.8, they will have to rely on other financing methods.
Given that they are no longer inclined to use convertible bonds, preferred stock will become the main channel.
Currently, their IPO performance is strong, but the response to the ATM (at-the-market) issuance has been average. However, this may change due to the newly launched floating rate preferred stock STRC.
This new stock had a very strong trading volume in its first week on NASDAQ, and it is possible to expand the issuance through the ATM method in the future, which was also officially announced in their financial report yesterday.
Steven**:**** They are now frequently mentioning two indicators: “Bitcoin per share” and “Bitcoin yield.” Can you briefly explain the difference between the two and why the latter is more important?
Lance: In fact, these two indicators are closely related. The calculation of Bitcoin returns itself cannot be separated from the “Bitcoin holdings per share.”
The research we published indicates that the underlying data for the yield is actually the changes in “per share Bitcoin”. So I don’t think “per share Bitcoin” is a completely new concept; it’s just that this time they made it more evident.
Assuming that from the beginning of 2023 until now, the company’s Bitcoin holdings per share have increased by about 130%. In other words, if you hold one share, the corresponding Bitcoin now is 2.3 times what it was at that time, which is an astonishing growth.
As for the “Bitcoin return rate,” for example, what they are currently announcing is 25%, which means that the number of Bitcoin per share has increased by 25% compared to the past.
Personally, I don’t really care about “how much each share is specifically”; I’m more concerned about the growth rate of that number. So in comparison, I pay more attention to the “Bitcoin yield” indicator.
Steven**:**** What do you think about the ultimate goal of Strategy? Is it healthy for a company to hold such a large share while still being in the “early stages” of the Bitcoin industry?**
Lance: Currently, Strategy holds about 630,000 Bitcoins, accounting for approximately 3% of the total supply of Bitcoin (21 million). This ratio is calculated based on the total supply, which also includes the 5% that is believed to be permanently lost.
From a more macro perspective, this company still has a lot of room for growth in the future. However, there will indeed come a day when the Bitcoin they hold reaches a certain “limit,” and further accumulation may affect the broader financial applications of Bitcoin.
No one can be certain what this critical point will be. My view is that they have about ten more years to continue advancing the current strategy and keep increasing their holdings.
Our model predicts that by the end of 2027, they may hold about 4.3% of the total Bitcoin supply, which is an increase of about 1.3 percentage points from now. It is foreseeable that they still have stable growth potential in the coming years.
Steven: The Strategy has raised the annual target because the Bitcoin strategy performed well in the first six months. I saw that your report this morning also updated the model. Can you share your current predictions for the end of the year?
Lance: Our current prediction is to achieve a Bitcoin yield of 32.1% for the year.
This figure is 2.1 percentage points higher than the company’s current official target, and we believe the company is very likely to raise its target again, even exceeding expectations. Frankly, I think the 32.1% prediction we provided has a greater likelihood of an upward adjustment rather than a downward one.
Our method of calculating “Bitcoin returns” is slightly different from theirs; we base it on the purchase cost rather than the market end price. Therefore, our data is more conservative and cannot be directly compared to the figures disclosed by the company.
As a reference, we predict that the company will achieve approximately $15.3 billion in Bitcoin revenue this year, with around $16 billion in the next two years.
Different calculation methods will yield a forecast range between 16 billion to 22 billion dollars. We chose a more conservative approach, which we believe is more reasonable. However, there is no single correct answer to the final result.
