Strategy Inc. (NASDAQ:MSTR), known as the largest publicly traded holder of Bitcoin (BTC), has recently purchased an additional 1,229 BTC. The transaction, completed through selling Class A common stock, amounted to $108.8 million, with an average purchase price of $88,568 per Bitcoin. According to the company's filing with the Securities and Exchange Commission (SEC), this purchase was executed last week, further increasing its total Bitcoin holdings to 672,497 BTC, acquired at an aggregate cost of $50.44 billion. This translates to an average cost per Bitcoin of approximately $74,997.
Year-to-date, Strategy has achieved a Bitcoin yield of 23.2% through 2025, underscoring its continued commitment to Bitcoin accumulation despite market fluctuations. This activity follows a recent capital raise of $2.2 billion, indicating ongoing investor backing for the company’s strategic approach.
Nevertheless, the investment approach and performance have attracted criticism, notably from financial commentator Peter Schiff. He has publicly challenged the effectiveness of Strategy's Bitcoin buying spree, pointing out that after five years of acquisitions at an average cost near $75,000 per Bitcoin, the company has only realized a “paper profit” of 16%, which equates to an annualized return of just over 3%.
Schiff argued that, from a pure investment perspective, Strategy would have achieved superior returns by allocating funds to virtually any other asset class than Bitcoin. His critique extends to Strategy's capital structure, particularly concerning its use of preferred stock. He warned investors that dividends on these preferred shares are discretionary, depending solely on company declaration, and criticized this as a “trap” for investors. According to Schiff, dividends that are not declared do not accumulate; they are forfeited. This dynamic, he posits, may eventually cause institutional fund managers to divest from the preferred shares once dividend payouts fail to materialize, potentially destabilizing Strategy's capital-raising mechanism.
Strategy's market valuation currently hovers around $45 billion, which is notably less than the stated value of its Bitcoin holdings, assessed at approximately $59 to $60 billion. This discrepancy represents a significant market discount, attributed primarily to investor worries about leverage levels, dilution risks, and Bitcoin’s price decline of about 30% since October 10.
The company's stock price has declined even more steeply, falling around 50% since October 10, which marks a substantial underperformance relative to Bitcoin's own price action over the same period. Chart analysis demonstrates a precipitous drop from near $500 in July to the current level, representing a depreciation exceeding 68%.
Technical indicators reinforce the bearish outlook on the stock. The Supertrend metric shifted to a bearish signal at $187.86, subsequently acting as strong resistance, while the SAR indicator at $179.77 confirms the prevailing downtrend. Strategy has consistently recorded lower lows with minimal price recoveries, reflecting a shortage of buying interest. All exponential moving averages (EMAs) have been trending downward with the price remaining well below these levels. Apart from the recent low close to $153.70, there appears to be no meaningful support to prevent further declines.
The stock's stabilization prospects currently depend on reclaiming the $180 to $190 range, a hurdle that remains challenging in the absence of Bitcoin establishing a stable price floor. Until Bitcoin itself stops declining, it is likely that institutional and retail investors will continue to withdraw from Strategy's stock, prolonging its downward trend.