Before, magnate Michael Saylor had encountered difficult situations, but not to this extent. The stock value of Saylor's company, Strategy, which holds more than 3% of the global Bitcoin supply, has plummeted. Compounding the issue, the firm is contending with dual challenges: a declining cryptocurrency market and an approaching regulatory shift that is expected to prompt widespread selling of its shares. On Monday, the corporation revealed a reserve fund of $1.2 billion to cover upcoming interest and dividend payments, yet this measure had minimal impact on boosting its stock. All these developments have reignited criticism from Saylor's detractors, who argue that Strategy's unconventional approach, centered on issuing stock to acquire Bitcoin, is unviable or even resembles a Ponzi scheme.
TL;DR
- Strategy's stock value has plummeted due to a declining crypto market and upcoming regulatory shifts.
- A $1.2 billion reserve fund was created to cover interest and dividend payments, but had minimal impact.
- Critics argue Strategy's stock-for-Bitcoin approach is unviable, while supporters see Saylor as a trailblazer.
- MSCI's new regulation may force investment managers to divest Strategy shares, potentially leading to an $8 billion sell-off.
Saylor has weathered difficulties before. This includes an accounting controversy in 2000 that nearly capsized one of his prior ventures and resulted in him lose $6 billion a portion of his personal wealth within a single day. Concurrently, those who support Saylor's actions reject detractors as reflexive Bitcoin opponents who fail to grasp the digital currency or the financial strategies underpinning Strategy's functions.
Saylor might extricate himself from this predicament, as he has previously, but the current situation carries greater risks. In recent times, Strategy's acquisitions have contributed to crypto's unprecedented surge, establishing Saylor as Bitcoin's foremost proponent. Consequently, any action by Strategy to divest a portion of its assets—an event its chief executive suggested might occur last week—would not only diminish values but could trigger a confidence crisis and a widespread divestment. Concurrently, a further decline in Strategy’s stock valuation could jeopardize its long-term survival and precipitate the downfall of numerous other entities that have emulated its operational framework. The forthcoming period is poised to definitively reveal whether Saylor is a trailblazer in cryptocurrency finance, as his supporters assert, or merely another risk-taker whose good fortune has evaporated.
A looming $8 billion sell off
The cryptocurrency sector often celebrates October as "Uptober", yet this year did not provide the typical surge in prices. Instead, the period witnessed one of the most significant market crashes in the industry's timeline. For Strategy, the month also delivered unwelcome developments when, on October 10, the major financial entity MSCI put forth a new regulation that would remove it from several widely followed indices.
This removal procedure, anticipated to be implemented in February, would compel investment managers globally to divest their stakes in Strategy, along with other entities where at least 50% of their assets are in cryptocurrency. In November, JP Morgan warned the regulatory adjustment might result in investment funds liquidating Strategy stock valued at $2.3 billion, with the divestment potentially escalating to over $8 billion should additional index providers emulate MSCI's action.
Heightened market understanding of MSCI's intentions has already prompted a divestment. MSTR stock (the MSTR ticker symbol represents Strategy's former designation, Microstrategy) has fallen approximately 50% since October 1. Consequently, a crucial indicator called MNAV, which gauges a cryptocurrency firm's share value relative to its Bitcoin reserves, has on multiple recent instances fallen below unity. For a firm whose MNAV stood at roughly 2.45 MNAV a year ago, the present valuation highlights the complete disappearance of the sustained premium Strategy shares once commanded over Bitcoin.
Facing this wave of negative reports, the typical CEO might have released a string of subdued remarks requesting forbearance. However, Saylor isn't a typical CEO and has instead reacted by increasing the volume of memes he shares online. These memes praise Bitcoin and portray Saylor as an AI-generated action figure—prompting his numerous followers to reshare the memes or create their own iterations.
These meme strategies have previously benefited Saylor, transforming Strategy into a momentum investment during upward market trends. However, lately, the tactic hasn't halted the stock's decline, and last month, Saylor experienced an unusual social media misstep. In an attempt to counter a false report that the firm was divesting its Bitcoin holdings, Saylor uploaded a picture of himself atop a life raft amidst rough waters, with a burning vessel disappearing behind him. Observers, even supporters of Saylor, noted that the image suggested Strategy's leader was prioritizing his own escape during a crisis instead of facing it with his company.
HODL pic.twitter.com/sQysm4i88t
— Michael Saylor (@saylor) November 14, 2025
Irrespective of Saylor's intentions, the small dispute brings up concerns regarding whether Strategy will contemplate liquidating its Bitcoin assets—an action the firm had characterized as impossible but, lately, seems prepared to consider.
Selling stock to buy Bitcoin
Towards the end of November, Strategy purchased 130 Bitcoin, increasing its overall holdings to a total of 650,000. These are valued at approximately $58.5 billion based on early December market rates. To provide perspective, this represents roughly 3.1% of Bitcoin’s total supply of 21 million (with 95% already in circulation), positioning Strategy as the foremost owner of the digital asset, excluding its originator, Satoshi Nakamoto, whose 1.1 million units are thought to be permanently inaccessible.
Saylor stated that the firm has purchased bitcoin at an average cost of $74,436 each, with an overall expenditure of approximately $48.4 billion, encompassing all charges and outlays. To achieve this, Strategy required a capital stream, and since Bitcoin yields no return, the firm's primary method has been to issue common stock to finance its acquisitions.
A significant advantage of this method is that, unlike borrowing, common stock doesn't impose any financial commitments on the firm. This isn't true, however, for preferred stock—and Strategy has also released a substantial amount of this type, requiring it to disburse consistent dividends to its stockholders. These commitments encompass payments approximating $200 million scheduled for completion by December 31, with the majority being in the form of dividends (Strategy, similar to most businesses, also holds some liabilities).
To convey an image of financial soundness, Strategy undertook an uncommon action in early December by establishing what's termed a dollar reserve amounting to $1.4 billion, which Saylor asserts will suffice to meet dividend commitments for the subsequent 21 months.
During a December 1 investor presentation, Saylor revealed the reserve fund, remarking with his characteristic confidence that “It’s our intention to keep stacking Bitcoin.” While this objective is likely to remain a lofty aim in the immediate future, Strategy might end up divesting Bitcoin instead.
“We can sell Bitcoin and we would sell Bitcoin if we needed to fund our dividend payments below 1x mNAV,” Strategy CEO Phong Le said on a podcast last Friday. It was a remarkable statement from a company that is premised on the value of Bitcoin always increasing. More remarkable was when Saylor, who frequently exhorts the popular hold-onto-your-Bitcoin phrase “HODL”, repeated on Monday that Strategy could sell some Bitcoin.
On Tuesday, Strategy's Chief Financial Officer, Andrew Kang, clarified the assertion, stating that the firm intended to view Bitcoin as an ultimate option, exclusively if MNAV falls beneath 1 for a “very extended period.”
Regardless of the details, Strategy's admission that it might divest Bitcoin, alongside the introduction of the new dollar reserve fund, has ignited fresh animosity from Strategy's detractors. Among these is Peter Schiff, a proponent of the gold sector and a persistent critic of cryptocurrency, who asserts the firm is disintegrating and that Saylor is the “biggest conman” figure on Wall Street.
This marks the start of the conclusion for $MSTR. Saylor was compelled to divest shares, not for Bitcoin acquisition, but solely to procure U.S. Dollars to cover MSTR's interest and dividend commitments. The stock's performance is ruined. The company's operational plan is deceptive, and @Saylor stands as the preeminent swindler on Wall Street.
— Peter Schiff (@PeterSchiff) December 1, 2025
If Schiff’s view—hardly a consensus one—is correct and Strategy has to liquidate, then the broader crypto market could be hit hard since the sell-off would almost certainly trigger a downward price spiral for Bitcoin. Even if Strategy has to sell only a portion of its holdings, it could trigger a contagion in which hundreds of other so-called digital asset treasuries (DATs) do the same.
Despite critics characterizing Strategy and the DAT model as an unstable structure reliant on financial deception, some observers consider them pioneers in a developing sector of cryptocurrency financial institutions.
'Every piece of negative information has been disclosed'
Regardless of one's opinion of Saylor, his flair for the dramatic is undeniable. During his December 1 address unveiling the new U.S. Dollar reserve, he showcased a futuristic spacecraft, rendered in vibrant green and orange, featuring a Bitcoin-powered engine at its heart. “Think of [the dollar reserve] as a $USD battery. We’re basically using a nuclear reactor to spin a generator to charge a battery,”, Saylor elaborated.
To Saylor’s critics, these actions appear to be the epitome of unethical sales tactics. Conversely, some view him as an innovator employing powerful analogies and visuals to aid public comprehension of an intricate emerging financial system.
Among these individuals is Sebastian Bea, a former long-serving BlackRock leader and Olympic oarsman, who presently heads a digital asset treasury known as ReserveOne. Bea's assessment is that Saylor is engaged in a complex, enduring plan and has assembled a group of corporate finance specialists, such as board member Peter Briger, who boasts an accomplished background at Goldman Sachs and Fortress Investment Group.
Within this situation, Saylor's intentions to acquire an increasing quantity of Bitcoin by leveraging capital markets for stocks, raw materials, and futures contracts are logical. As he and Strategy's Chief Financial Officer elaborated this week, this strategy involves generating income through Bitcoin lending and the sale of protected call options.
For all of this to function, however, Bitcoin's worth must continue to increase. This idea seems preposterous to cryptocurrency doubters, but proponents of crypto correctly note that Bitcoin has outperformed almost every other investment during the last ten years, and is positioned for sustained growth as major organizations, from state-backed investment funds to university endowments, incorporate it into their holdings. In a recent positive indicator, Vanguard—which had previously declined to include crypto in its holdings for an extended period—elected to add Bitcoin and similar cryptocurrency exchange-traded funds this week.
Should Bitcoin continue its upward trend, Strategy will be capable of securing financing based on its increased worth, much like a business leverages property in a strong market. While periods of decline are anticipated, Bea asserts that Strategy “has planned for this” maintains a sound balance between its assets and liabilities.
Bea further states that the current surge of digital asset treasury firms resemble a novel banking category, with their operational framework undergoing swift development. He notes that certain entities, such as ReserveOne, are structured around cryptocurrencies like Ethereum, which offer returns, contrasting with Bitcoin's approach, thereby providing greater flexibility in corporate financial management. Bea conceded that the forthcoming decision by MSCI to omit DATs from its indices constitutes a substantial obstacle, and commented that businesses centered on crypto assets require a period for maturation.
Cosmo Jiang, a managing director at Pantera, a venture capital company specializing in cryptocurrency, also feels that digital asset reserves—among them a Solana-focused company he is supporting—will establish themselves as a lasting element of the economic system.
“We’re seeing the genesis of a whole new category of business,” Jiang told Coins2Day, adding that DATs are poised to earn significant revenue from the fast-growing world of decentralized finance.
In separate remarks to Bloomberg, Jiang made the case that the sector is currently at low point, but that the current malaise around Strategy and similar firms is temporary. “We’re at the point where all the bad news is out there and the bears are the loudest voices in the room.”
Jiang pointed out, though, that numerous businesses recently engaging in crypto accumulation probably won't endure, and that the operational framework demanded not merely a reserve of digital assets, but extensive proficiency in financial markets and corporate financial management.
“There will be two or three large winners” for each major cryptocurrency, he predicted. If this is the case, the coming months will likely determine whether one of those is Strategy.
