Bitaigen Research 
After the Bitcoin flywheel fails, Strategy can work its way out by increasing USD reserves, lowering leverage, shifting to more conservative debt financing, or gradually selling Bitcoin.
Since October, MSTR has fallen roughly 50%. After peaking at a highlight of $457 last year, the price dropped sharply and has vastly underperformed the broader market. MarketBeat data shows a 12‑month low of about $155.61 and a high above $450, placing the stock now in a relatively low‑valuation range with extremely high volatility.
Why has MSTR’s share price been sluggish for months, lagging not only the market but also performing worse than Bitcoin itself? This has led the market to question whether the Bitcoin flywheel effect has already become ineffective.
In this article we dissect the pressures facing the strategy after the Bitcoin flywheel stops working, and systematically evaluate its possible recovery paths, including asset‑allocation adjustments and leverage management. By deeply interpreting market inter‑correlations, we aim to help readers clarify the logic behind the current situation and grasp the direction for future decision‑making.
Enjoy Double the Joy in a Bull Market, Endure Double the Pain in a Bear Market
The sharp decline in Bitcoin price is the most direct trigger. Since the peak on October 6, Bitcoin has dropped about 31%. Strategy, which holds roughly 650,000 BTC (about 3.1% of the total supply), cannot escape the impact. MarketWatch further calculates that the correlation between BTC and MSTR is close to 0.97, meaning the two move almost one‑for‑one. However, because of leverage, MSTR’s price swing is amplified—Bitcoin falls 31% while MSTR falls more than 50%.
The market also questions whether the flywheel model that sustains MSTR is breaking down. Strategy’s mNAV currently stands at 1.15; CryptoSlate notes that the market is only willing to pay a 15% premium over the value of its Bitcoin holdings. If mNAV drops below 1.0, further share issuances would become highly dilutive. Bloomberg also points out that, as MSTR’s market value is only slightly above the value of its Bitcoin holdings, the premium is severely compressed, and this positive‑feedback loop appears to be failing.
In addition, Strategy purchased only 130 BTC between November 17 and November 30, spending $11.7 million—a trivial amount for a company that holds roughly 650,000 BTC. This indicates that Strategy recognizes that, at the current premium level, large‑scale share issuance would harm rather than benefit shareholders, prompting it to apply the brakes.
The Financial Times observed that after MSTR’s share price fell from its peak, its performance has begun to lag behind Bitcoin itself, raising doubts about whether the equity vehicle can still add more value than simply holding BTC. Especially now that spot Bitcoin ETFs have launched, allowing investors to allocate Bitcoin more conveniently, why should they still bear MSTR’s associated debt burden, management risk, and potential equity dilution?
Furthermore, this year Strategy has financed its Bitcoin purchasing plan by issuing a substantial amount of convertible bonds and high‑interest preferred shares. These financing tools impose a heavy fixed‑payment load. A Seeking Alpha analysis report notes that this pushes the annual preferred‑share dividend burden into the hundreds of millions of USD; CryptoSlate estimates the figure could reach $750 million to $800 million per year, not including interest on the convertible bonds. The issue is that MSTR’s traditional software business, although still generating revenue each quarter, …
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