Why Strategy (MSTR) Is Now Worth Less Than Its Bitcoin Holdings

Source: CoinEdition Original Title: Why Strategy (MSTR) Is Now Worth Less Than Its Bitcoin Holdings Original Link:

• Strategy’s market value has fallen below its net Bitcoin holdings.
• The company created a $1.44 billion U.S. dollar reserve for debt and dividend payments.
• Analysts and commentators are divided on the strategy’s implications.

Strategy’s market capitalization has fallen below the value of its Bitcoin holdings, even after the company established a $1.44 billion cash reserve on Dec. 1.

Numerous analysts have weighed in on the implications. YouTuber Adam Livingston, among others, said the update undermines long-standing liquidation fears tied to the company’s Bitcoin-heavy balance sheet.

Market Cap Lags Behind Net Bitcoin Position

Strategy Inc. is now valued at roughly $45 billion. That figure sits nearly $10 billion below the current value of its 650,000 BTC, which are worth more than $55 billion at recent prices.

Even after subtracting $8.2 billion in debt, the company’s net Bitcoin holdings remain above its market valuation.

The Kobeissi Letter said the gap shows the market is discounting the company’s financial structure, noting that net Bitcoin value now exceeds the market cap by several billion dollars. The stock is down about 12% over the past day and 57% since early October.

Company Establishes $1.44 Billion Cash Reserve

The newly announced USD reserve is funded through at-the-market stock sales and is earmarked for dividend and interest payments.

Strategy said the reserve currently covers about 21 months of obligations, with plans to expand it to at least 24 months depending on market conditions.

“Establishing a USD Reserve to complement our BTC Reserve marks the next step in our evolution,” Executive Chairman Michael Saylor said. Chief Executive Officer Phong Le added that the reserve reinforces the company’s ability to withstand short-term volatility.

The company also confirmed the purchase of 130 additional Bitcoin, bringing its holdings to 650,000 BTC acquired at an average price of roughly $74,436.

“Major Turning Point”

Bitcoin author and MSTR Holder Adam Livingston published a lengthy video breakdown shortly after the press release. He said the new reserve removes the basis for past claims that the company could go insolvent.

According to Livingston, the reserve gives the company almost two years of operating funds without needing to sell any Bitcoin—contradicting long-standing online claims that it was at risk of forced liquidation.

He also said the update addresses rating-agency concerns about liquidity and market access. With both a growing Bitcoin treasury and a large cash buffer, he argued the company is now better positioned to handle volatility while still accumulating Bitcoin.

Moreover, he stressed that the announcement “kills the ‘LUNA 2.0’ narrative” and forces critics to rethink their assumptions about the firm’s financial stability.

Furthermore, supporters of the strategy said the dual-reserve model improves resilience. CEO of JAN3 Samson Mow described the company’s treasury structure as a “fortress,” saying the cash reserve acts as a moat around long-term Bitcoin holdings.

Peter Schiff: “How Much Longer Would We Pretend?”

Meanwhile, Bitcoin critic Peter Schiff pushed back. He argued the model depends on issuing equity and higher-cost debt to buy assets or stay liquid, and questioned whether it can survive if capital markets tighten.

“How much longer will investors pretend this is a real business and not just a bet on Bitcoin?” he wrote.

Guidance Updated to Reflect Bitcoin Volatility

Strategy also updated its 2025 guidance, using a year-end Bitcoin price range of $85,000 to $110,000. It projected broad ranges for operating income, net income, and earnings per share, noting that its results are susceptible to Bitcoin’s price.

Executives added that the forecasts assume more capital raises to fund additional Bitcoin purchases and maintain the reserve.