Strategy’s Bitcoin Buying Spree: A Capital Markets Feat with a Harsh Reality
In 2025, Strategy (formerly MicroStrategy) achieved a remarkable feat in the capital markets by purchasing more Bitcoin than the global mining network produced in the entire year. The company added approximately 225,027 BTC to its corporate treasury, bringing its total holdings to approximately 672,497 BTC. This buying campaign exceeded the estimated post-halving issuance of 164,000 coins and triggered a mathematical supply shock.
However, as 2026 begins, the company faces a harsh market reality: its share price has halved, dramatically decoupling from the assets it is hoarding. Data from Strategy shows the company’s shares fell 52% in the final three months of the year, reaching a market capitalization of $48.3 billion. This is significantly less than the $59.2 billion market value of its Bitcoin holdings.
Arbitrage Settlement and Short Interest
For much of the previous cycle, Strategy traded at a significant premium to the net asset value (NAV) of its holdings. This premium existed because investors viewed the stock as a leveraged volatility vehicle. Hedge funds and proprietary trading desks monetized this by using “MSTR arbitrage” trading: buying stocks and shorting Bitcoin futures to reap the volatility premium.
However, this dynamic reversed in 2025 when the company flooded the market with equity to finance its shipment of 225,000 coins, causing the premium to collapse. As a result, sophisticated market participants began to engage in premium trading or adopt a new structure: selling long spot Bitcoin through ETFs and shorting Strategy stocks to take advantage of the narrowing spread.
Market data confirms the intensity of this battle. As of December 15, Strategy held a short interest of 29.14 million shares, representing 11.08% of its public float, according to Marketbeat data. Although this represents a 4.62% decline from November, Strategy remains one of the most shorted stocks on the market.
The Reality of Debt vs. the “Discount”
A critical mistake in simple retail analysis was comparing market cap directly to the Bitcoin stack and calling the difference a “discount.” At press time, the company’s Bitcoin reserves were valued at $59.2 billion, while its market cap was just $48.3 billion. To the casual observer, the stock appeared to be trading at a nearly $11 billion discount to its gross assets.
However, institutional analysis takes a tougher approach and focuses on enterprise value (EV) to account for the company’s huge debt load. Adjust for the billions in convertible bonds used to finance this accumulation and the picture changes. The company’s enterprise value at the end of the year was $62.3 billion, which is about $3 billion higher than the value of the BTC stack.
The Dilution Engine vs. “BTC Yield”
The Strategy accumulation engine that sold stocks to buy Bitcoin faced a critical stress test in the fourth quarter. To finance its purchases, the company relies on issuing shares on the market (ATM). In 2025, this rinse-and-repeat loop expanded the treasury to the level of nation-states, but also created a reflexivity trap.
Management promotes a key performance indicator (KPI) known as “BTC Yield,” which measures the percentage increase in BTC holdings per share. The thesis is that as long as the company can issue shares at a premium over the cost of acquiring Bitcoin, the increase will benefit shareholders. However, by the end of 2025, the market’s focus shifted from “yield” to pure dilution.
The Coming Year
Given the above, the outlook for 2026 depends less on general sentiment and more on the specific sensitivity of Strategy’s balance sheet to Bitcoin’s price movement. The previous “only increasing” correlation has been dissolved and replaced by a complex interplay of leverage, issuance rhythm, and index flows.
In a scenario where Bitcoin heads towards $110,000, the wealth gap, the difference between the coin stack and the debt-adjusted equity value, would widen significantly. Historically, spreads of this magnitude force a repricing as short sellers are squeezed out and value investors step in. Under these conditions, the premium could return provided management slows the pace of issuance.
For more information, visit https://cryptoslate.com/how-strategy-used-half-its-stock-price-to-buy-225000-bitcoin-in-2025/
