If you own any Bitcoin, it hasn't been an easy ride over the past eight months. Since the top cryptocurrency reached a peak price of $126,198.07 in October last year, it has fallen 52% (as of June 24).
As the world's largest holder of Bitcoin, with 847,363 units on the balance sheet, it has been an even more troubling period for Strategy (MSTR +1.69%), formerly known as MicroStrategy. The enterprise software business, which morphed into a Bitcoin treasury company, has seen its share price skyrocket 723% in the past six years. But it's 80% off its record. And it now trades below $100 for the first time since early 2024.
Is Strategy a buy, sell, or hold right now?
Image source: The Motley Fool.
Weak sentiment for digital credit
One of the most impactful ways Strategy has accumulated Bitcoin recently is through its STRC perpetual preferred equity offering, a move billionaire founder Michael Saylor calls digital credit. Launched in July 2025, it has raised $10.5 billion in capital thus far. This makes it one of the biggest preferred equity offerings ever.
This financial instrument, designed for those seeking a steady income, is intended to eliminate the volatility and risk of principal loss characteristic of Bitcoin. Investors who own one share of STRC currently receive $11.52 in annual dividends. The effective yield is 15.4%.
While STRC is meant to trade at a par value of $100, it has sold off dramatically since late May. Its price is now $74.57, indicating weakening sentiment toward the company's overall financial durability. This doesn't present Strategy with supportive market conditions to raise capital through STRC.
However, Strategy has yet to miss a dividend payment on STRC or any of its other preferred equities. Now that it has moved to semimonthly dividends, the next payout will be on July 15. Assuming the business can fulfill this obligation, it will be a clear signal to the market that Strategy's financial engine still works.
NASDAQ: MSTR
Key Data Points
High risk, high reward
This is an extremely volatile stock. Strategy is essentially a levered bet on the price of Bitcoin, giving investors greater upside and downside exposure to the world's most valuable cryptocurrency, which itself is very volatile.
If investors liked Strategy stock when it was trading at a much higher price, it introduces an even more compelling opportunity while shares are around $94. The company's diluted market cap of $29.4 billion is near an all-time low level relative to the $51.6 billion worth of Bitcoin on its balance sheet. And the company has a cash reserve of $1.4 billion it can tap if needed to fund obligations.
Long-term investors with the patience to wait for market sentiment to improve should consider buying shares. But it's important to size the position appropriately.
