Michael Saylor's Strategy Inc. (formerly MicroStrategy), a company known for its aggressive Bitcoin (BTC) acquisition strategy, is currently facing its hardest test as its funding model misfires. The company's stock, MSTR, has plummeted by roughly 81% from its all-time high, erasing over $90 billion in market value. This decline has made MSTR one of the most dramatic casualties of the recent crypto selloff.
The core of the problem lies in the sharp decline of Bitcoin, which has fallen approximately 30% over the past 90 days, from about $87,000 to $60,770. This drop has severely impacted the value of Strategy's Bitcoin holdings, which totaled 847,363 BTC as of June 21, worth around $53 billion at current prices. At Bitcoin's peak in September 2025, the same amount was valued at approximately $78.8 billion, indicating a $25 billion vaporization that has eroded the equity cushion supporting the company's leveraged structure.
Adding to the financing woes, Strategy's "Stretch" preferred stock (STRC), designed to trade around a $100 par value to fund Bitcoin purchases, has fallen to an all-time low of approximately $80.5. This signals that the market is demanding a much higher yield to hold Strategy's preferred paper, severely straining its funding model. The company's annual dividend obligations have climbed to about $1.2 billion, and its cash reserves of $1.4 billion now provide only about 14 months of coverage, down from over seven years. Julio Moreno, head of research at CryptoQuant, suggests Strategy should halt Bitcoin purchases and rebuild its cash reserves to about $2.8 billion for 24 months of coverage.
For the first time since commencing its Bitcoin accumulation in 2020, Michael Saylor has signaled the possibility of selling a portion of the company's Bitcoin holdings. This marks a significant departure from his long-held "never sell" doctrine and indicates the severe pressure on Strategy's capital structure. The question for the market is whether Strategy can navigate this brutal bear market without heavily diluting shareholders, raising expensive capital, or being forced to sell a substantial part of its BTC stack.
