Strategy Inc., known by its ticker MSTR, has delivered an impressive 42% annualized return since it swapped its treasury reserves for bitcoin back in August 2020. This outperformance beats not only bitcoin itself but also the elite "Magnificent Seven" tech stocks and the broader S&P 500 over the same period. Yet, the company’s massive bitcoin stash, totaling 843,775 BTC and acquired at a cost of $63.69 billion, currently sits around 18% below its purchase price.
Michael Saylor, Strategy’s Executive Chairman, has repeatedly highlighted this remarkable run to underline the success of transforming a mid-cap software firm into a bitcoin-focused holding entity. The company’s stock and bitcoin prices have tracked closely over time, with volatility causing swings in the annualized return figure since the strategy’s debut. This year, the divergence has been particularly noticeable as MSTR’s shares have tumbled while bitcoin accumulation continued unabated.
To give shareholders a clearer picture amid this complexity, Strategy launched new metrics on July 24: Net BTC Per Share, BTC Hurdle ARR, and BTC Floor ARR. These aim to account for debt and preferred stock obligations and better reflect what the bitcoin treasury is worth on a per-share basis. Net BTC Per Share resembles a book-value calculation but is measured in bitcoin. BTC Hurdle ARR defines the annualized bitcoin return needed just to cover the company’s funding costs, while BTC Floor ARR marks the minimum return required to sustain the treasury.
These fresh indicators come as Strategy navigates a challenging balance sheet scenario with a treasury that remains underwater despite persistent bitcoin buying. The firm’s approach contrasts with traditional tech stocks and indexes, emphasizing a long-term bet on cryptocurrency as a reserve asset. Meanwhile, the crypto market continues to draw attention from institutional players who weigh risks and returns differently than conventional investors.
This content is for informational purposes and does not constitute financial advice.
