Bitcoin Holder Strategy Faces Unprecedented Valuation Crisis

A remarkable financial milestone has been reached by cryptocurrency investment firm Strategy, signaling potential trouble for the company. For the first time in years, the market capitalization of Strategy has fallen below the total value of the Bitcoin holdings on its balance sheet. This development raises serious questions about the viability of what was once considered an innovative investment approach.

This week witnessed a significant turning point for Strategy as its market valuation dipped to approximately $65.34 billion during trading hours—falling short of the roughly $66 billion worth of Bitcoin the company possesses. Historically, Strategy's shares traded at a substantial premium as investors bought into the company's vision. That premium has now completely evaporated.

Market participants are now aggressively pricing in several risk factors, including continuous dilution through new share issuances and an expanding debt burden. The financing model that was previously celebrated for its innovation has transformed into a significant liability. The underlying calculation is straightforward yet severe: when a company's equity value drops below its asset holdings, fundamental issues are at play.

Downward Momentum Intensifies

Performance metrics paint a concerning picture: Strategy shares have declined 20% over the past month and are down 22% year-to-date, currently trading at their lowest level throughout 2025. While Bitcoin itself has posted modest gains, Strategy's stock continues its precipitous decline. The leverage effect that previously amplified upward movements is now working in reverse, magnifying weaknesses and neutralizing potential recoveries.

Should investors sell immediately? Or is it worth buying Strategy?

Adding complexity to the situation, Strategy continues its aggressive Bitcoin acquisition strategy. The company recently purchased 487 BTC for nearly $50 million, bringing its total holdings to a massive 641,692 BTC. Rather than instilling confidence, this persistent accumulation appears increasingly desperate to market observers. The central question has shifted from whether Strategy can effectively accumulate Bitcoin to whether its entire business model remains sustainable.

Insider Transactions Signal Concern

Alarming signals are emerging from within the company itself. General Counsel Wei-Ming Shao has engaged in substantial share sales, disposing of 10,668 shares between November 10th and 11th, followed by an additional 2,600 shares on November 13th. Although these transactions were executed under a predetermined trading plan, their timing raises eyebrows amid the current market turmoil.

The options market reflects growing investor anxiety, with implied volatility measures skyrocketing as traders anticipate significant price fluctuations. Strategy appears trapped in a downward spiral with no immediate exit strategy in sight. The company's shares have effectively decoupled from Bitcoin's performance—and the divergence is decisively negative.