In a significant development for investors and stakeholders, the premium that Strategy (formerly known as MicroStrategy) traders pay on the firm’s net asset value (NAV) has seen a considerable contraction throughout 2025. Once trading at an exorbitant multiple of its underlying assets, MSTR’s market dynamics have shifted dramatically, raising questions about its stock price’s future trajectory.
Historically, Strategy maintained a lofty premium compared to its NAV, buoyed by its exclusive position as a Bitcoin treasury company. The peak was reached in late 2024, when MSTR traded at nearly four times its underlying asset value. However, as 2025 progressed, the price-to-NAV ratio (mNAV) has experienced a steady decline, with recent reports indicating it plummeted to 1.32 by late October.
This mNAV decline translates to a challenging investment landscape, especially for those who entered the market amid the company’s earlier favorable valuation. While Bitcoin (BTC) showcased year-to-date returns exceeding 23%, MSTR’s performance has been disappointing, managing only a minimal 3% return during the same period.
Several factors contribute to this diminishing NAV premium. A vital element is the dilution effect from the continuous issuance of new shares to fund further crypto acquisitions. Each new issuance dilutes the existing holdings, negatively impacting the NAV per share unless it correlates with an immediate or greater increase in assets, such as Bitcoin holdings. As Strategy continues to issue new stock in 2025, concerns among shareholders regarding dilution risks have intensified, particularly in the wake of fluctuations in BTC prices.
Moreover, increasing competition within the Bitcoin treasury sector has exacerbated the situation. With numerous alternative companies adopting a similar operational model to that pioneered by Chairman Michael Saylor, justifying Strategy’s premium has become increasingly complex. The growing availability of options for investors has likely compelled the market to recalibrate MSTR’s valuation closer to its intrinsic asset value.
Despite the rising competitive pressures, Strategy still embodies a benchmark in the Bitcoin treasury field. Nevertheless, apprehensions are mounting regarding a potential bubble in the crypto treasury segment, particularly as BTC faced bearish trends in mid-October. Rivals like Metaplanet witnessed their market values dip below NAV, even as Strategy continued to maintain a premium.
Market observers emphasize the necessity of discerning the true value provided by these treasury firms. Presently, mNAV serves as a crucial metric influencing stock worth alongside spot crypto prices. As MSTR concluded trading on a positive note that reflected Bitcoin’s weekend gains, analysts remain cautious, highlighting potential vulnerabilities in the long-term outlook. Concerns about whether BTC has reached its cyclical peak persist, prompting some experts to warn of a possible breakdown from an upward trend that MSTR has experienced since the year’s start. If this occurs, it would serve as a substantial indicator that the recent upward movement may have reached its conclusion.
