key insights:
- MicroStrategy’s NAV premium has fallen to 1.32, its lowest in 2025, reflecting waning investor enthusiasm.
- MSTR stock has gained just 3% year-to-date, significantly lagging behind Bitcoin’s 23% increase.
- The decline is linked to share dilution from repeated equity offerings used to fund Bitcoin purchases.
- Rising competition from new Bitcoin treasury companies has reduced MicroStrategy’s market advantage.
MicroStrategy, now rebranded as Strategy, has seen a marked decline in the premium investors are willing to pay relative to its net asset value (NAV). Once the dominant Bitcoin treasury company, the firm’s stock traded at nearly four times the value of its underlying Bitcoin holdings in late 2024. However, this premium has eroded steadily throughout 2025, signaling a shift in investor sentiment and market structure.
According to recent data, Strategy’s modified price-to-NAV ratio (mNAV) dropped to 1.32 on October 27. The figure highlights a substantial contraction from previous highs, with returns failing to keep pace with Bitcoin’s performance. Year to date, Bitcoin has gained over 23%, while Strategy’s share price has risen just 3%. The difference underscores growing concerns about the firm’s valuation model as it competes with a growing field of digital asset treasury companies.
Stock Dilution and Competition Weigh on Investor Confidence
One of the primary drivers behind Strategy’s falling premium is its ongoing issuance of new shares to finance Bitcoin acquisitions. This strategy, while expanding the company’s crypto holdings, also results in share dilution. Unless the funds raised through new issuances directly lead to proportionate increases in Bitcoin assets, the NAV per share declines, reducing investor value.
Throughout 2025, Strategy has continued to issue stock, which has amplified concerns about dilution risk among shareholders. The impact of this model becomes more pronounced when Bitcoin’s price weakens, as any downturn in BTC often fuels criticism of the company’s aggressive financing approach. The market appears to be adjusting its valuation of Strategy accordingly, aligning it closer to peers that trade nearer to their asset value.
At the same time, the Bitcoin treasury market has become increasingly crowded. Several publicly listed companies have adopted variations of Strategy’s approach, building Bitcoin reserves as part of their corporate strategies. This growing competition has made it more difficult for Strategy to justify its once-significant premium, as investors now have multiple alternatives offering similar exposure to Bitcoin’s price movements.
Outlook for Strategy and Bitcoin Treasury Firms
Despite the shrinking premium, Strategy remains the benchmark for corporate Bitcoin treasuries. The firm’s established presence and leadership continue to set the tone for the sector, even as competitors gain traction. As Bitcoin’s price action turned bearish in mid-October, some treasury firms, including Metaplanet, saw their market values fall below their NAVs. Strategy, however, managed to maintain a modest premium, reflecting its relative resilience.
Market analysts note that NAV remains a critical metric for evaluating crypto treasury companies. Beyond Bitcoin’s price trends, a firm’s mNAV often determines how investors value its shares. As trading resumed this week, Strategy’s stock rose alongside Bitcoin’s weekend gains, although analysts, including CCN’s Valdrin Tahiri, cautioned that the broader trend could shift if Bitcoin fails to sustain its current support levels.
With Bitcoin’s long-term direction uncertain, the performance of treasury firms like Strategy will continue to serve as a key indicator of institutional confidence in digital assets.
