The sharp fall in the stock market of Strategy (MSTR), the company that has the largest reserve of bitcoin (BTC) in its treasury, has sparked controversy in the markets and provoked sharp criticism from economist and investor Peter Schiff, a well-known detractor of bitcoin. Schiff has attacked the company, ensuring that «the actions [de Strategy] «They are bankrupt and the business model is a fraud.» These criticisms arise as a result of Strategy’s creation of a new dollar reserve of 1.44 billion. This fund is intended to ensure the payment of dividends and interest over the next 12 to 21 months and is financed through the sale of MSTR shares, without the company having liquidated part or all of its BCT reserve which reaches 650,000 BTC. The investor interprets this move as “the beginning of the end for MSTR,” stating that Strategy president Michael Saylor was “forced to sell shares not to buy bitcoin, but to buy US dollars simply to fund MSTR’s interest and dividend obligations,” and questioned the viability of the company’s business model.
Strategy’s highest price in 6 months was $457. Source: TradingView. Strategy has experienced a drop of 25% in the last month and 50% in the last six monthswith its shares trading around $180, a price not seen since October 2024. This pullback affected its base multiple of net asset value (mNAV), an indicator that compares the company’s market capitalization with the total value of its bitcoin reserves.
Strategy recovers an important metric
The mNAV reached 0.84 last November, suggesting that the market valued the company for less than its BTC holdings were worth, as reported by BitcoinDynamic. However, this indicator has shown a recovery, standing at 1.03. It is pertinent to remember that Strategy’s mNAV drop below 1 in November took place without the company selling bitcoin; On the contrary, he continued buying more, a fact that reinforces the perception of its solvency and absence of urgent liquidity needs. The volatility in Strategy’s shares is linked to a previous decline in the price of bitcoin, which fell 32% from its all-time high of $126,000 at the beginning of last October. Despite the concerns, analysts such as David Battaglia, with a bullish outlook on MSTR and bitcoin, express optimism, indicating that a rise in the price of bitcoin will force arbitrage funds to lose money on their hedges, forcing them to buy MSTR en masse. Battaglia concluded that Saylor has set up a “programmed bullish time bomb” for the company.
