Strategy (MSTR 1.86%), formerly known as MicroStrategy, has become the world's largest corporate holder of Bitcoin (BTC 0.74%) over the past five and a half years. It was once a data analytics software company, but its growth stalled out as it faced fierce competition from Microsoft, Salesforce, and other cloud-based rivals.
Instead of investing in its software business to catch up, the company began accumulating Bitcoin in Aug. 2020. Its co-founder and then-CEO, Michael Saylor, who directed that strategic shift, expected Bitcoin's value to soar and overshadow its stagnant software business.
Image source: Getty Images.
Saylor has been right so far. Bitcoin's price has surged about 670% since its first disclosed purchase, and Strategy's stock has skyrocketed roughly 1,100%. As of this writing, the company has spent $53.9 billion to buy 709,715 Bitcoins, which are currently worth $63.2 billion. That's higher than its current enterprise value of $61.3 billion, so its stock looks undervalued.
In late 2024, Strategy launched a new "21/21" plan to raise $42 billion -- including $21 billion in equity and $21 billion in fixed income securities -- to fund its future Bitcoin purchases. At the time, Saylor also predicted Bitcoin's price would surge to $21 million by 2045. That bold prediction implies Strategy's stock still has significant upside. Let's see how it could generate a ten-bagger gain (or more) if Bitcoin's price surges.
NASDAQ: MSTR
Key Data Points
What is Strategy's long-term strategy?
Strategy doesn't plan to shut down its enterprise software business, which has posted annual revenue declines for the past three years. Instead, it intends to use that legacy business to generate recurring revenues and cash to fund its Bitcoin purchases. It doesn't plan to strengthen it through any new R&D or marketing initiatives.
By retaining its software business, Strategy can still issue its own convertible notes and raise capital at lower rates than Bitcoin trusts or exchange-traded funds (ETFs). It also faces less regulatory scrutiny and is eligible for more financing structures than those "pure play" funds. Those advantages arguably make it a more appealing proxy investment in Bitcoin for institutional investors. As long as it keeps reeling in those big fish, it can likely raise more cash through fresh stock and debt offerings.
This strategy won't be sustainable if Bitcoin's price collapses, since most of its Bitcoin purchases are leveraged. At the end of the third quarter of 2025, it shouldered $15.5 billion in total liabilities (including $8.2 billion in long-term debt).
If the market value of its Bitcoin ($63.2 billion) declines by more than 75%, its total liabilities would exceed its total Bitcoin holdings, rendering its balance sheet insolvent. That doesn't mean it will go bankrupt right away, but its equity will turn negative, and it will struggle to raise enough cash to pay off its debt.
However, if Bitcoin's price keeps rising, Strategy can continue to leverage the value of its existing Bitcoin holdings to raise fresh cash to fund more Bitcoin purchases. Therefore, it's an all-in bet on Bitcoin -- and it could generate massive gains if that flywheel keeps spinning.
How could Strategy deliver multibagger gains?
Bitcoin is still mined with the energy-intensive proof-of-work (PoW) consensus mechanism, which requires powerful miners running on application-specific integrated circuits (ASICs). It has a finite supply of 21 million tokens, nearly 20 million of which have already been mined, and every four years its mining rewards are cut in half. That scarcity makes it more comparable to gold, silver, and other commodities than other smaller cryptocurrencies.
Saylor, like other Bitcoin maximalists, expects the U.S. dollar and other fiat currencies to collapse as governments expand their monetary policies to address rising debt. As that happens, investors will allocate more of their portfolios toward hard assets like gold and silver. Bitcoin will also benefit from that secular shift if it retains its reputation as "digital gold".
If Bitcoin's price soars 23,500% and hits Saylor's $21 million target by 2045, Strategy's stock would soar more than tenfold. That outlook might seem extreme, but we should remember that the U.S. dollar has already lost more than 40% of its purchasing power over the past 20 years. If that devaluation accelerates, Bitcoin's price could skyrocket, driving Strategy's stock higher.
