Strategy Inc. is gearing up for an unprecedented Bitcoin acquisition that may far exceed its recent $1.25 billion purchase. On January 18, co-founder Michael Saylor made waves on social media platform X when he shared a graphic with the caption “Bigger Orange,” indicating strong intentions to surpass the 13,627 Bitcoin acquired recently.
This latest acquisition, should it occur, would elevate the firm’s total Bitcoin holdings above the 700,000 mark, solidifying its position as the largest corporate holder. Currently, it trails only behind BlackRock’s IBIT exchange-traded fund and the estimated 1.2 million BTC holdings of Bitcoin’s pseudonymous creator, Satoshi Nakamoto.
However, this ambitious strategy unfolds against a challenging backdrop. Strategy’s stock saw a significant decline last year, plummeting over 50%, while its market-to-net-asset-value (mNAV) premium has decreased to around 1.0x. Such compression poses a risk to the arbitrage model that Saylor has relied on for financing expansions. The recent trend of institutional capital favoring spot Bitcoin ETFs, which offer direct exposure without the complexities tied to Strategy’s shares, has diminished the company’s leverage.
To counteract this, Strategy has adopted aggressive funding mechanisms over the past year, raising approximately $25 billion through the sale of common stock and the development of new types of preferred shares, including STRC. This strategy has drawn a cautious response from Wall Street, with TD Cowen downgrading its price target for the stock from $500 to $440 while still maintaining a Buy rating. Analysts have pointed out a decline in “Bitcoin Yield” for fiscal 2026, indicating that the reliance on increased equity issuance is diluting shareholder returns.
Despite the skepticism surrounding its strategy, some market analysts assert that Strategy has built a formidable competitive advantage that traditional financial institutions struggle to replicate. Bitcoin analyst Shagun Makin commented on the firm’s innovative approach to accumulate Bitcoin at scale, noting that they have been successful in packaging it into marketable products that traditional banks cannot effectively provide.
Makin further suggested that the regulatory scrutiny and market resistance faced by the firm may stem more from its success than from any inherent flaws in its business model, pointing out that banks would face significant challenges to mimic Strategy’s approach without endangering their financial stability. As such, the options for traditional finance may be limited to attempts to curtail or regulate Strategy’s novel methodologies.
