Bitcoin investors are now facing a significant challenge as the cryptocurrency market experiences a prolonged decline.
According to some predictions, there’s a 36% chance that Bitcoin treasury companies will offload parts of their holdings by year’s end, a rise from 22% just a few days ago.
This bearish trend emerged when Bitcoin dropped below a crucial support level, trading at $76,039—just under the average purchase price for Strategy’s Bitcoin assets. Data shows it has plummeted by 2.9% in the last day, 15.4% in the past week, and 18.1% over the last month.
Currently, Bitcoin sits about 40% lower than its peak in October at $126,080. Some speculate that rather than bouncing back to $100,000, it might dip to around $69,000—a possibility that now seems over 72% likely.
How Strategy acts next may hinge on its net asset value multiple (mNAV), which compares its enterprise value against its Bitcoin holdings.
If the mNAV is above 1, the stock is considered to be trading at a premium to Bitcoin, allowing the company to issue shares through open market offerings for further acquisitions.
At this moment, the ratio is approximately 1.08. Should it drop below 1, their purchasing strategy could slow down or come to a halt.
Myriad suggests there’s almost a 90% chance that Strategy’s mNAV will not rebound to 1.5, as it has currently dipped to 0.85, remaining fairly stable from a month ago.
Despite the gloomy outlook, many analysts doubt that Strategy will liquidate its Bitcoin assets anytime soon.
Nick Pucklin, a digital asset analyst, remarked that he doesn’t see the decrease in Bitcoin prices affecting Strategy’s plans. He noted that Michael Saylor, the company’s co-founder, has always been prepared for economic downturns, like any seasoned Bitcoin investor. He added that immediate liquidation isn’t on the table, and their first tranche of convertible debt isn’t expected until early next year.
Another analyst, Aurélie Bartel from Nansen, suggested that for now, a larger investment in Bitcoin is unlikely since the current BTC spot price is aligned with their purchase price, which could lead to dilution.
Nevertheless, the company has continued its purchases, announcing plans to acquire an additional 855 BTC. Saylor recently tweeted simple yet firm advice: “1. Buy Bitcoin. 2. Don’t sell Bitcoin.”
Bartel pointed out that whether Strategy decides to sell BTC will largely depend on its cash reserves to meet obligations, especially concerning preferred stock dividends.
Currently, the firm holds a significant amount of Bitcoin—713,502 BTC, valued at over $52 billion at the present rate—and is under pressure as its stock has decreased for eight straight months.
In fact, MSTR has seen its value tumble from a high of $540 in November 2024 to about $133 now, a staggering drop of over 75%. The company still retains $2.25 billion in cash, which should cover approximately 30 months of dividend payouts.
Marcin Kazmierczak, co-founder of Redstone, believes that while their long-term accumulation strategy remains intact, decisions around selling might depend more on market conditions and capital allocation rather than a fundamental shift in their beliefs.
Ultimately, the crucial factor may not be whether they need to sell, but rather if the risk-reward balance justifies their current strategy.
Further comments from Strategy have yet to be disclosed.
