The investment landscape for Bitcoin appears increasingly challenging, with Strategy (formerly known as MicroStrategy) facing significant stock price declines this week. Shares of the company dropped 14.4%, bringing them down by 43% year-to-date, as the broader cryptocurrency market also experienced turbulence. As of November 21, 2025, Bitcoin’s price fluctuated, momentarily dipping to around $80,000 before recovering to approximately $85,000.
Traditionally, Strategy has traded at a premium relative to its underlying Bitcoin net asset value (NAV), but that premium has significantly compressed this year. Current data indicates a market cap for Strategy of $49 billion, which is not substantially higher than the company’s Bitcoin holdings, valued at $46 billion once outstanding debt is taken into account. The gap between the stock price and Bitcoin’s performance has become increasingly narrow, raising questions about the viability of continuing to invest in Strategy as a proxy for Bitcoin.
The company, which has aggressively acquired Bitcoin since 2020, has seen its shares outstanding increase by 199% over the past five years. This strategy has previously worked in its favor, as rising Bitcoin prices contributed to a remarkable 667% increase in Strategy’s stock price during that same period. However, with Bitcoin declining about 10% this year while Strategy’s shares plummeted, the dynamics have clearly shifted.
The challenges for Strategy are compounded by increasing difficulties in raising new funds through stock offerings. In response, the company has sought alternative financing options, such as the recent sale of preferred stock that generated $700 million in cash. While this move provides necessary liquidity, it also adds to the company’s financial burden, given that the preferred stock carries a 10% annual interest payment.
Given the current state of the market, potential investors might find it prudent to reconsider their approach. Historically, investing in Strategy made sense when its stock was significantly above its assets. However, with the gap now considerably narrowed, some analysts suggest that investing directly in Bitcoin may be a more straightforward and less complicated option.
The complexities involving Strategy’s debt structure, preferred stock liabilities, and potential future share dilution could pose risks for investors. For those who believe in Bitcoin’s long-term potential, purchasing the cryptocurrency directly may offer a clearer and simpler pathway to exposure, alleviating the uncertainties associated with investing in the company itself.
