Is Strategy's Bitcoin Bet Hurting Shareholders? Here's What Investors Should Know
Khyathi Dalal 18 hours ago
NewsCryptocurrency
Strategy often beats Bitcoin in rallies but lags during consolidation and declines as demand and valuation premiums weaken, raising equity-decay risks.
Strategy (NASDAQ:MSTR) may deliver stronger gains than Bitcoin (CRYPTO: BTC) during rallies, but its tendency to underperform during consolidation periods raises questions about its long-term appeal compared with holding the asset directly.
Market commentator Gary Cardone expressed frustration with his MSTR investment, calling its performance disappointing.
He criticized his investment’s performance, noting that daily dividend reinvestment lifts its yield to 12.75% while suggesting daily payouts could make short-selling pressure harder to sustain.
On the other hand, industry expert Tim Lamb highlighted the risks of equity decay in Bitcoin treasury stocks.
Strategy’s underperformance is attributed primarily to weakening investor demand and shrinking valuation premiums.
He noted that Strategy’s mNAV fell from 5.32 to 1.71 between 2020 and 2021, and from 3.79 to 1.59 between 2024 and 2025.
Lamb identified buyer exhaustion as the main driver, arguing that share issuance adds pressure but is not the primary cause of equity decay.
Why Does Strategy Underperform BTC During Consolidation?
Lamb’s research found that Strategy outperformed Bitcoin in four of five major rallies between 2023 and 2025 but underperformed in four of five subsequent consolidation periods.
MSTR gained a median 13% relative to Bitcoin during rallies but lost 12% during consolidation. When Bitcoin fell 20% or more, MSTR plunged 50%–65%.
In three of four major rallies, Strategy peaked 12–82 days before Bitcoin, declining 18%–24% even as the cryptocurrency continued rising.
Could Strategy Still Outperform BTC?
Despite the historical risks, Lamb remains optimistic about Strategy’s near-term prospects, citing its relatively low valuation multiple and amplified Bitcoin exposure.
He warned that Strategy’s growing size could limit its ability to generate additional leverage-driven gains.
He also highlighted Strive (NASDAQ:ASST) as a smaller, more flexible Bitcoin treasury company with potentially greater upside amplification.
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