- Strategy relaxes stock issuance rules as Bitcoin premium drops to historic lows.
- Slowing Bitcoin purchases highlight mounting pressure on Saylor’s funding model.
- Bitcoin rose 23% since Nov 2024, but Strategy’s stock fell 22%, eroding its premium edge.
Strategy has revised its stock issuance rules, granting itself wider discretion to sell common shares. The updated guidance removes the prior 2.5x minimum market net asset value (mNAV) threshold, which once served as a safeguard against excessive dilution. The original cap only allowed equity issuance below that ratio for specific financial obligations like debt interest or preferred dividends. The company now states it may issue common stock below this threshold when conditions are considered advantageous.
This change comes as the mNAV premium, the market price of Strategy shares relative to its Bitcoin holdings, has compressed substantially. In November 2024, the mNAV premium reached 3.4x. By August 2025, it had declined to 1.6x, signaling reduced investor enthusiasm for the firm’s equity as a Bitcoin proxy.
Capital Flexibility Amid Premium Compression
The company’s decision reflects growing pressure on its preferred financing mechanism as the share premium narrows. Since 2020, Strategy has relied on selling stock at high premiums to acquire Bitcoin at a discount. However, the recent decoupling between its share price and Bitcoin’s appreciation challenges this approach. Between November 2024 and August 2025, Strategy’s stock fell 22% while Bitcoin rose 23%, eroding the arbitrage advantage.
This change in investor sentiment has weakened the firm’s chances of raising capital within the self-imposed constraints. Consequently, the new issuance policies have been set to provide the company with more room to acquire financing for its purchases and sustain liquidity. As the demand for the preferred shares declines, the stock-based funding approach by the firm seems to be adjusting to a tighter market scenario.
The Viability of the Bitcoin-First Treasury Model
The laxity of Strategy towards the sale of equity has prompted questions about the sustainability of the Bitcoin-first treasury approach. The rate at which the company acquires Bitcoins has significantly slackened, indicating limitations to the entry of capital. In the week ending August 17, 2025, it bought 430 Bitcoin at a price of $51.4 million, whereas in the previous week it bought 155 BTC, which is very little compared to past practices.
Analysts such as Brian Dobson at Clear Street admit that the updated requirements grant increased flexibility to opportunistic buying. But others, such as James Chanos, cite structural issues, such as a lacklustre appetite in preferred shares and a decline in the belief in Strategy as a dependable proxy to Bitcoin.
The State of Competitiveness and Investor Sentiment
The falling mNAV premium exhibited by the company underscores a shift in which its market value is being interpreted for direct exposure to Bitcoin. This trend suggests that investors are shifting to alternative vehicles, such as exchange-traded funds (ETFs) or other corporates with crypto exposure, rather than being concerned about dilution.
Related: Trump’s Pro-Crypto Cabinet Fuels Strategy’s $4.2B Bitcoin Push
Shareholder confidence has wavered as the stock underperforms during Bitcoin’s broader rally. The share of the firm can no longer fetch a huge premium as it previously did, hence the company cannot purchase bitcoins effectively by issuing stock. This growth could curtail its capacity to serve as a key aggregator in the crypto arena, at least when using prevailing market forces.
The willingness to loosen the equity issuance policy, as highlighted by Strategy, underscores the current capital management strategy as mNAV premiums continue to compress. Although the changed rules are flexible, they pose threats to the firm’s Bitcoin-based treasury arrangements.
Competitors have more efficient methods for accessing Bitcoin, and the strategy of dominance that the Strategy used may be questioned more often. How it chooses to evolve next will hinge on market sentiment, whether or not alternatives are in demand, and whether it can continue to benefit its crypto-focused status as a publicly traded entity.
