Over the past five years, there's arguably been no better stock than Strategy (MSTR -4.84%), the company formerly known as MicroStrategy. It's up a head-spinning 1,894% over that time period as of October 8. That works out to a compound annual growth rate (CAGR) of 81.4%.
If Strategy is able to keep up that type of performance over the next decade, then it could be a stock that sets you up for life. A modest investment of just a few thousand dollars would be worth nearly $1 million at the end of 10 years. But is it really that simple?
The key to Strategy's success
There has been one central factor to Strategy's success over the past five years: a decision to downplay its core enterprise software business and embark on an aggressive program of Bitcoin (BTC -1.98%) accumulation.
Starting in August 2020, Strategy began a program of buying Bitcoin at regular intervals. This buying has intensified of late, to the point where Strategy is now holding an incredible amount of Bitcoin. Strategy still runs its software business, but the financial results from that operation have become rounding errors next to the massive Bitcoin portfolio.
The total count now is 640,031 BTC. At today's prices, that's worth nearly $80 billion.
By far, Strategy is the largest corporate holder of Bitcoin in the world, and nobody else even comes close. For example, the next-largest corporate holder of Bitcoin is MARA Holdings, a Bitcoin mining company that holds 52,850 BTC. Strategy even holds more Bitcoin than the U.S. government, which has approximately 198,000 BTC.
Strategy pioneered the entire concept of corporations buying and holding Bitcoin for the long haul. There are now more than 100 digital asset treasury companies attempting to emulate the same strategy.
This strategy can be boiled down to the following: raise capital as cheaply as possible from outside investors (debt holders or stock buyers), and then deploy it immediately to buy more Bitcoin.
Bitcoin / U.S. dollar chart by TradingView
That strategy has paid off handsomely for Strategy over the past five years. While Strategy is up nearly 2,000% over that time period, Bitcoin is only up 950%.
Until January 2024, the price of Strategy stock closely tracked the price of Bitcoin. But after that date, when the new spot Bitcoin ETFs launched, Strategy has been absolutely on fire. As you can see from the chart, Strategy has been outperforming Bitcoin since early 2024.
Should Strategy be valued higher than its Bitcoin holdings?
Investors are so convinced that Strategy has figured out the secret to success that they have been willing to attach a premium to its stock price. In short, they are valuing Strategy higher than the value of its Bitcoin holdings. At the end of 2024, the premium was nearly 2x. Since then, however, it has shrunk dramatically.
Right now, the value of Strategy's Bitcoin is $80 billion, and the value of the company is $95 billion. So the market is rapidly reaching parity: The company's valuation almost exactly matches the valuation of its Bitcoin holdings.
No surprise, then, that the Bitcoin treasury company model has come under fire recently. According to some, it's just not sustainable over the long haul.
Critics claim that these digital asset treasury companies should trade for less than the value of their crypto holdings. After all, just how many times can these companies continue to go out into the capital markets and raise money from investors? As the price of Bitcoin rises, the amount required to finance new purchases also rises, complicating matters further.
Already, some Bitcoin treasury companies have experienced some turbulence, in the form of falling stock prices. According to Coinbase Global, the most likely outcome is for the biggest Bitcoin treasury companies to gobble up the smaller Bitcoin treasury companies. That might be good news for Strategy, which is clearly the top dog here. But it might also lead to unwelcome competition as smaller rivals bulk up.
Is 2025 a sign of what's to come?
That's why it's important to keep track of what's happening with Strategy over the final months of 2025. Since midsummer, the company's stock has gone sideways or down, with no real upward momentum.
For the year, Strategy stock is only up 13%, while Bitcoin is up 30%. This shouldn't be happening. Until recently, the story had been completely the opposite: Strategy had been outperforming Bitcoin.
Thus, investors have a choice. They can invest in a top Bitcoin proxy stock such as MARA or Strategy, or they can invest in Bitcoin directly.
That's a tough decision to make, but if you're planning for the long term, then the answer seems obvious: Go with Bitcoin. Over the short term, it might be possible to beat Bitcoin, but it's hard to see how any company, no matter how clever or innovative, is going to out-Bitcoin Bitcoin over the long haul.
