The Bitcoin Treasury Gamble: Is Strategy (MSTR) Still a Buy?
The allure of Bitcoin treasury companies surged when Bitcoin’s price reached peaks in 2023. Companies like Strategy (MSTR), the largest corporate holder of Bitcoin, were seen as leveraged plays on the cryptocurrency’s future. But with Bitcoin experiencing a 45% price drop over the past four months, the question arises: is Strategy still a viable investment?
Strategy’s Bitcoin Hoard: A Double-Edged Sword
Strategy’s core strategy, since 2020, is simple: accumulate Bitcoin. As of early February 2026, the company holds 714,644 bitcoins, representing over 3% of all Bitcoin in circulation. They continue to add to their holdings, recently purchasing another 1,142 bitcoins for $90 million.
Underwater Holdings and Q4 Losses
But, this aggressive accumulation comes at a cost. Strategy’s Bitcoin holdings are currently “underwater,” meaning the company’s cost basis of $76,056 per Bitcoin exceeds the current market price of under $70,000. This resulted in a staggering $12.4 billion loss in Q4 2025 due to impairment write-downs.
The Impact on Strategy’s Stock Price
The financial strain is reflected in Strategy’s stock performance. The stock has plummeted approximately 60% over the past year, recently hitting an 18-month low of $104. This decline makes it more challenging to fund further Bitcoin purchases, which are often financed through stock issuance.
Why Direct Bitcoin Ownership May Be Preferable
Given these challenges, analysts suggest that investors might be better off purchasing Bitcoin directly rather than investing in Bitcoin treasury companies like Strategy. The current market capitalization of Strategy ($40 billion) is now less than the value of its Bitcoin holdings ($50 billion), suggesting a potential disconnect between the stock price and the underlying asset.
Broader Concerns for Bitcoin Treasury Companies
Strategy isn’t alone. The Motley Fool research indicates that most Bitcoin treasury companies are currently facing similar difficulties. This widespread struggle casts doubt on the viability of investing in these companies until Bitcoin’s price recovers significantly.
Nasdaq 100 Inclusion: A Temporary Reprieve?
Despite the volatility, Strategy has retained its position in the Nasdaq 100 index (NDX) as of December 22, 2025. This inclusion provides some benefit from passive investment flows, but doesn’t negate the fundamental challenges posed by the current market conditions.
Strategy’s Evolution: From Software to Treasury
It’s important to remember that Strategy was originally a business intelligence software provider. Its transformation into a Bitcoin treasury company has fundamentally altered its business model and increased its exposure to cryptocurrency volatility.
FAQ: Strategy and Bitcoin
Q: What is Strategy’s primary business?
A: Strategy’s primary business is accumulating and holding Bitcoin as its main treasury asset.
Q: How much Bitcoin does Strategy hold?
A: As of early February 2026, Strategy holds 714,644 bitcoins.
Q: Is Strategy currently profitable?
A: No, Strategy reported a $12.4 billion loss in Q4 2025 due to Bitcoin impairment write-downs.
Q: What is the current outlook for Strategy’s stock?
A: Analysts recommend a “sell” rating for Strategy until Bitcoin’s price recovers substantially.
Q: What percentage of corporate Bitcoin treasuries are underwater?
A: Approximately 60% of corporate Bitcoin treasuries are currently underwater.
Did you know? MSCI is considering excluding crypto treasury companies from its benchmarks, potentially impacting investment flows.
Pro Tip: Before investing in any cryptocurrency-related company, thoroughly research its financial health and understand the risks associated with Bitcoin’s volatility.
What are your thoughts on Strategy’s future? Share your insights in the comments below!
