Strategy Surges 53% in a Month…Why is it Rising More Than Bitcoin?

Strategy Surges 53% in a Month…Outperforming Bitcoin, but the '$64.5 Billion Cash Lifeline' is Key

▲ Strategy (MSTR), Bitcoin (BTC)/AI Generated Image ©

Strategy (MSTR), which has virtually adopted Bitcoin (BTC) as its core business, surged 53% in a month, more than double Bitcoin's 25% increase. However, an analysis suggests that its capital raising strategy, based on its $64.5 billion Bitcoin holdings, is a double-edged sword: it amplifies stock prices in a bull market but could increase dividend and financing burdens if a long-term downturn occurs.

According to the investment media outlet The Motley Fool on September 20 (local time), Strategy has transformed from an enterprise software and data analytics company into the world's largest Bitcoin treasury company. The value of Bitcoin currently held by the company is $64.5 billion, accounting for 92% of its total enterprise value. Over the month leading up to September 18, the stock price rose 53%, but it is still 58% below its all-time high. The current stock price is stated as $153.92, with a market capitalization of $59 billion.

The core of the bull case lies in Strategy's structure, which allows it to generate higher returns than Bitcoin. The company has historically issued debt and currently raises funds by selling common and preferred stock, which it then invests in purchasing Bitcoin, a scarce asset. In fact, while Bitcoin rose 1,060% over the past five years, Strategy's stock price surged 2,300%. The media outlines a bullish scenario where if Bitcoin's price continues to rise long-term and the company keeps expanding its holdings, this capital market utilization strategy could amplify stock price increases.

However, this structure heavily relies on continuous access to capital markets. While Bitcoin is 36% below its October peak last year, Strategy fulfilled $629 million in dividend obligations in the first half of 2026 alone. The company even sold some Bitcoin to secure funds to avoid default. If Bitcoin declines for an extended period, it would become difficult to raise equity capital on reasonable terms, and the dilution of existing shareholder equity due to continuous stock issuance was cited as a key risk in the bear case.

Specifically, if the Bitcoin bear market prolongs, the current $5.1 billion in dollar cash holdings could become the key defense line for paying preferred stock dividends. An analysis suggests that if these funds are depleted, Strategy might have to issue additional debt under unfavorable terms. Even if Bitcoin rises, if investor sentiment towards Bitcoin treasury companies utilizing complex financial instruments sours, there's a risk that Strategy's market capitalization might not sustain the premium attached to its Bitcoin holdings and could remain at a discount for an extended period.

The Motley Fool emphasized that to understand Strategy, one must ultimately examine both Bitcoin's long-term outlook and the company's capital raising structure. While investing directly in Bitcoin or utilizing a Bitcoin spot ETF are more direct means of price exposure, Strategy is described as a high-risk structure affected not only by Bitcoin's price but also by its fundraising and the management's execution capabilities. The media suggested that investors who fully understand this business structure and are willing to take on additional risks might consider a small initial position of 1-2%.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*