Summary Strategy Inc. offers a compelling proxy for Bitcoin exposure, now trading at a 1.05x mNAV, near parity with its underlying BTC holdings. MSTR’s capital-raising flywheel—via equity, convertible notes, and preferred stock—enables aggressive BTC accumulation, with $8.24B in debt and $876M annualized dividends supported by a $2.25B USD reserve. In BTC uptrends, MSTR can outperform direct BTC ownership by compounding BTC per share through accretive capital raises, while downside risks include dilution and market skepticism on funding methods. With MSTR’s share price battered and mNAV approaching 1x, I see potential value if shares trade at a discount, given the belief in a BTC rebound. After more than a decade of being in existence, the idea of Bitcoin ( BTC-USD ) becoming an investable asset class has become normalized, especially with a market cap that sits at $1.82 trillion. Strategy ( MSTR ) looks interesting with a multiple of net asset value (mNAV) of 1.05x. The net asset value is the estimated value of the underlying asset, and the mNAV is the market value/NAV. In this case for MSTR, the mNAV is (Bitcoin holdings × BTC price) + cash/other assets − debt − preferred liquidation value (and other liabilities). When the mNAV exceeds a level of 1.0x, it means that MSTR is trading at a premium to its underlying asset. At one point, MSTR traded at an mNAV that exceeded 2, and investors are getting a much better value on the most popular alternative to owning BTC-USD on its own. MSTR is essentially a BTC-USD treasury vehicle layered on top of a legacy enterprise software business. MSTR is tied to the price of BTC-USD, as it owns 709,715 BTC-USD. While MSTR still operates an enterprise software business, the market looks at it as a proxy to BTC-USD. MSTR maintains a dashboard on its website that discloses its BTC-USD holdings and other key performance indicators of the business. If you believe that BTC-USD will rebound from here, MSTR could be an interesting alternative to owning BTC directly, as it has received much larger multiples on its mNAV compared to where it is today. After looking into MSTR, I am getting more interested as the mNAV makes more sense than it previously did. Seeking Alpha How MSTR raises capital for its flywheel and what the implications are BTC-USD isn’t cheap, and it takes real capital to acquire it. MSTR doesn’t generate billions in profitability to add more BTC-USD to its stockpile, so it needs to raise liquidity from multiple instruments so it can add BTC-USD to its balance sheet. The first way that MSTR has raised capital has been with at-the-market (ATM) common stock offerings. Recently, on 1/5/26, MSTR issued an 8-K with the SEC that disclosed ATM sales activity and explicitly stated that the BTC-USD purchases in the reported period were made using proceeds from the sale of shares of MSTR stock. Looking through the filings, this has been a core mechanism that allowed MSTR to build its exposure to BTC-USD. They have basically diluted shareholders by adding additional shares under the premise that future appreciation in BTC-USD would outstrip the dilution incurred by shareholders. In addition to dilution through issuing common shares, MSTR has tapped the debt markets through convertible senior notes and preferred stock. Convertible notes have been a core component of MSTR’s strategy because they can reduce near-term cash interest expenses compared to just taking on traditional debt. They also provide MSTR with a call option on the equity. Recently, MSTR completed a $2.0 billion offering of 0% convertible senior notes due 2030 in February 2025. MSTR also issues preferred stock, which is backed by BTC-USD, which pays the buyers a dividend. MSTR has issued multiple preferred series with different terms that impact MSTR’s cash needs. I have outlined the 3 series of preferred stock that MSTR has issued below: STRK accumulates 8.00% cumulative dividends on a $100 liquidation preference, payable when or if declared STRC , a variable rate preferred series with dividends payable monthly when/if declared STRD disclosed as a 10.00% Series A preferred offering While MSTR is able to raise capital to acquire additional BTC-USD, it comes at the cost of interest on debt and dividends on preferred stock. In a September 30, 2025, Form 8-K , MSTR disclosed $8.24 billion of aggregate indebtedness. MSTR has $8.24 billion in debt and needs to pay $876 million in annualized dividends. Many investors and critics have asked if MSTR will need to sell BTC to pay their debt obligations. In the recent 8-K that MSTR filed at the beginning of 2026, MSTR stated that it maintains a U.S. dollar reserve to support preferred dividends and interest on indebtedness. They also disclosed that their reserve balance was $2.25 billion. This doesn’t eliminate risk, but it changes the narrative and lowers the probability that MSTR would find itself in a position where they would be a forced seller to meet their obligations if the price of BTC-USD declines. Strategy Why MSTR is starting to look interesting as a proxy on Bitcoin to me While owning BTC-USD is simple and provides direct ownership in the main asset class for MSTR, there are several reasons why investors prefer to hold MSTR. MSTR can issue equity or debt in the form of convertible notes and preferred stock to add additional BTC-USD to its balance sheet. When capital is raised at favorable terms, MSTR can increase its BTC-USD per share faster than they are diluting shareholders. This creates a scenario where MSTR can outperform BTC-USD on an appreciation basis. Some investors also don’t have accounts with brokerages that allow them to buy BTC-USD directly, and allocating capital toward MSTR allows them to have indirect exposure to BTC-USD as an asset class. The other aspect that becomes interesting for investors is that when BTC-USD rallies, MSTR has new opportunities to add additional BTC-USD as funding windows open. This puts MSTR in a situation where they can keep raising accretive capital and compounding the BTC-USD on their balance sheet. Individual investors don’t necessarily have the ability to utilize this method unless they are willing to utilize margin. MSTR becomes interesting during durable BTC-USD trends as it will increase MSTR’s treasury value and improve the coverage ratio on its debt. MSTR also gains favorable conditions to issue more equity, which is dilutive to purchase additional BTC-USD. In an uptrend, the appreciating value of BTC can improve the mNAV for MSTR and cause its shares to appreciate quicker than owning BTC-USD directly. The fact that MSTR has backstopped its debt to a degree takes the notion off the table that they would need to liquidate BTC-USD to fulfill debt obligations. MSTR has proven that it can consistently translate equity demand into BTC-USD accumulation without destabilizing the capital stack. Currently at a BTC-USD price of $89,616, MSTR’s BTC-USD reserves are valued at $63.66 billion, and the debt of $8.24 billion places the mNAV at 1.05x. As BTC-USD continues to remain volatile on the downward decline, MSTR is starting to look very interesting as investors are able to gain access to MSTR close to the spot price on BTC-USD. Strategy Risks to investing in MSTR While I am starting to get interested in MSTR, there are several risks that investors should consider. Please do your own due diligence, as MSTR is a volatile asset that has been declining as the price of BTC-USD falls. MSTR can underperform BTC-USD if the market gets bearish on MSTR’s funding methods to acquire additional BTC-USD. MSTR’s strategy of issuing common shares and debt may only work if the issuance grows its BTC-USD economics per share, which would need a large uptrend to do. MSTR’s 8-K disclosures showed a large unrealized digital asset impact, which can influence sentiment even if BTC-USD appreciates in value. Investors should understand how MSTR operates before considering adding it to their portfolio. Conclusion It feels like crypto winter is upon us, as BTC-USD has fallen -12.18% over the past year and by -28.89% from its 52-week high of $126,223.32. This has caused a crash in MSTR, which has declined by -58.87% over the past year. I don't believe that BTC-USD is a fad that is going away, and after looking into the metrics of MSTR, I am getting interested in this investment. The fact that they are backstopping the debt to a degree with over $2 billion provides a lot of breathing room on the interest obligations. As the mNAV gets closer to 1x, I am starting to see value to be unlocked in shares of MSTR. This is now on my watchlist, and if it continues to fall to where I can start a position at a discount to mNAV, I would start to get bullish as I believe that BTC-USD will rebound by a large amount in the future. Seeking Alpha