Bitcoin's strengthening position tests Strategy's significance
In the dynamic world of finance, the story of Strategy Inc's stock in 2025 is one that mirrors the rising strength of Bitcoin, yet falls short of the expected premium. This decline is primarily attributed to increased share dilution, financing pressures, and a shift in investor preferences towards direct Bitcoin investments.
The company's outstanding shares have grown over 40% in three years, reducing per-share value and investor enthusiasm. This share dilution, coupled with the inability to access cheap debt as easily, constrains Strategy's capital strategy and shareholder returns.
The rise of spot Bitcoin ETFs and simpler retail access channels has diminished the need to use Strategy’s stock as a proxy for Bitcoin exposure, undermining its valuation premium. This erosion of proxy appeal, coupled with market skepticism and weaker investor conviction, has shifted focus to lower support levels around $360 per share.
Despite these headwinds, Strategy reported strong operational results in 2025. With a net income of $10 billion in Q2 and a projected $24 billion for the full year based on a Bitcoin price target of $150,000, the company holds about 629,000 Bitcoin at a cost basis near $73,000 per coin. This strategic position has yielded a 25% return on Bitcoin year-to-date in 2025.
However, these strong fundamentals have not translated into a sustained premium in its equity valuation. The premium once attached to Strategy has compressed due to the ease of purchasing Bitcoin and regulated ETFs. Retail channels for buying Bitcoin have widened, allowing users to buy fractions of Bitcoin directly within apps like Coinbase, Robinhood, and traditional brokerages.
Institutional products such as Spot Bitcoin exchange-traded funds have gathered hundreds of billions of dollars in assets since early 2024. BlackRock's Bitcoin ETF alone has crossed $89 billion under management. This shift towards direct investment in Bitcoin has reduced the unique role Strategy once played as the de facto proxy for Bitcoin.
As Strategy faces these challenges, it seeks to redefine its appeal in this new environment to remain a prominent, listed vehicle tied to the largest corporate Bitcoin treasury in the world. Analysts remain divided on what comes next for Strategy, with some still seeing upside and price targets in the $550 to $570 range.
Vanguard, once the anchor shareholder, reduced its position last quarter, while Metaplanet, a treasury-style play in Japan, has dropped more than a third over the same period. The share price of Strategy has hovered in one of its narrowest ranges in years, with $360 emerging as the level investors are watching most closely.
As the landscape of Bitcoin investing evolves, Strategy finds itself at a crossroads. Its future lies in adapting to these changes and carving out a new role for itself in this burgeoning market.
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