Investors in Strategy (MSTR 5.11%) have been on a wild roller coaster ride. Shares have risen by 123% in the past five years (as of March 9). That gain is impressive, but the problem has been the intense level of volatility. The stock trades 71% below its peak.
Strategy shareholders can single out a decisive variable that can send the stock soaring in 2026.
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Patiently waiting on a Bitcoin resurgence
According to research from The Motley Fool, Strategy is the largest corporate holder of Bitcoin. After more purchases, as of March 9, it had just under 721,000 units of the top cryptocurrency on its balance sheet, translating to $50.9 billion at the current market price. Consequently, it's no surprise that in order for Strategy's stock to perform well, the leading digital asset must get out of its funk.
Bitcoin currently trades 45% off its record, which was established about five months ago in October of last year. The positive view on the situation is that this digital asset has always bounced back to reach higher record prices. There's no doubt that should Bitcoin climb throughout 2026, Strategy will make for a winning investment.
Consider that in the five-year period leading up to its peak in October, Bitcoin's price was up 1,060%. During that same time period, Strategy jumped 2,300%. The company's use of equity and debt capital to acquire more Bitcoin in value-accretive ways makes the stock a high-risk and high-reward way to bet on Bitcoin.
Bitcoin is really the only factor that impacts Strategy's share price. That's because the business kicked off its transition to becoming a Bitcoin treasury company in August 2020, when it purchased $250 million of the cryptocurrency as a hedge against the extraordinary level of money printing that was happening by the U.S. government after the onset of the COVID-19 pandemic. There's no end to the Strategy's plan of Bitcoin accumulation.
In the near term, Bitcoin, and Strategy as a result, could be lifted by looser monetary policy. If the Fed starts to lower interest rates again, while also embarking on more aggressive quantitative easing, it can drive investors toward riskier assets.
NASDAQ: MSTR
Key Data Points
Expect the volatility to continue
Strategy's 52-week high is 339% above its 52-week low. For comparison's sake, a business with stable operations like Berkshire Hathaway has a more muted difference of 19%.
Strategy's striking variability reveals the volatility that shareholders have to deal with. This is something that isn't going to abate anytime soon. And it's a key part of the decision-making process that investors can't ignore.
