Bitcoin News Today: MSTR Shares Tumble 11% as Bitcoin Slide Weighs on Leveraged Trade

Strategy Inc (MSTR), the publicly traded company with a significant Bitcoin (BTC) position, saw its stock plunge on Monday, December 1, 2025, closing at $157.81, a drop of 11% amid Bitcoin's volatility and broader market negativity according to reports. The stock's decline reflects a broader selloff, with shares down more than 40% from their October highs as market data shows.

The company announced the creation of a $1.44 billion cash reserve to support dividend payments and manage debt obligations, signaling management's attempt to stabilize investor confidence.

The sharp drop in MSTR's shares follows a month of declining Bitcoin prices and growing concerns about the company's dividend coverage according to analysis. Strategy, now holding 650,000 BTC valued at around $56 billion, remains one of the largest corporate holders of Bitcoin according to data. The stock has become increasingly sensitive to Bitcoin's performance, with its recent underperformance amplifying both gains and losses for investors using MSTR as a proxy for BTC according to market reports.

On December 2, 2025, MSTR shares were trading at around $171, down sharply from their autumn highs according to trading data. The stock had fallen more than 50% since its peak, with three-month returns near –49% and one-year returns at –56% according to financial analysis. The selloff has been exacerbated by Bitcoin's retreat from its November peak and growing skepticism about Strategy's leverage and dependence on Bitcoin's price performance according to market commentary.

Why the Standoff Happened

Strategy's creation of a $1.44 billion cash reserve through an at-the-market stock offering aims to cover at least 12 months of preferred stock dividends, with a longer-term goal of securing 24 months or more according to company statements. The move is intended to stabilize the company's financial position as it continues to hold a large Bitcoin portfolio according to market analysis. However, the announcement came as Bitcoin prices continued to slide, leading to further declines in MSTR's share price according to price data.

The company also dramatically cut its 2025 profit guidance, with possible outcomes ranging from a $5.5 billion loss to a $6.3 billion gain according to financial reports. This revision reflects the uncertainty surrounding Bitcoin's price trajectory and its impact on the company's financial performance according to analysts. Strategy now expects Bitcoin to trade between $85,000 and $110,000 by year-end, a far cry from earlier forecasts of BTC reaching $150,000 according to company forecasts.

How Markets Reacted

Trading volume in MSTR shares surged to 42.9 million on December 1, the highest since December 2024 according to market data. The stock fell 3.25% to $171.42 as investors digested the implications of the cash reserve and revised earnings guidance according to trading analysis. The sharp drop in MSTR mirrored the broader Bitcoin selloff, with the cryptocurrency down more than 30% from its October high according to market reports.

The selloff has reignited debates about Strategy's business model, with critics arguing that the company has become overly reliant on Bitcoin's price performance according to market analysis. Some analysts see the cash reserve as a prudent buffer, reducing the risk of forced Bitcoin sales to meet fixed obligations according to financial commentary. Others, however, view the move as a departure from the company's original strategy of using equity and debt to buy more Bitcoin according to market opinion.

What Analysts Are Watching

Analysts remain divided on Strategy's outlook, with some maintaining a "Moderate Buy" consensus, while others highlight the risks associated with the company's leverage and Bitcoin dependence according to market analysis. Benchmark's Mark Palmer, for example, reiterated his positive rating, arguing that fears of imminent distress are overstated according to market commentary. He estimates that Bitcoin would need to fall below $12,700 before Strategy's ability to service its debt and preferred obligations would be seriously threatened according to analyst projections.

However, not all analysts are reassured. Critics such as Peter Schiff have expressed concerns about the company's reliance on raising fresh capital to pay existing obligations according to market reports. They argue that Strategy's model is increasingly unsustainable if Bitcoin continues to underperform and if the stock trades at or below the value of its Bitcoin holdings according to financial analysis. The company's updated guidance also raises the importance of stable capital markets, as it now needs to raise more equity and preferred issuance to meet its financial targets according to market analysis.

Risks to the Outlook

The biggest risk for Strategy remains Bitcoin's price and volatility according to market analysis. A continued slide in BTC, particularly below the company's on-chain cost basis of around $74,436, would put additional pressure on both earnings and investor confidence according to financial data. If MSTR's market capitalization falls below the value of its Bitcoin holdings, the company may be forced to consider selling BTC to fund preferred dividends and debt obligations according to market analysis.

Leverage and fixed obligations also pose significant risks. Strategy has accumulated multi-billion-dollar fixed payments through convertible debt and high-coupon preferred instruments according to financial reports. The $1.44 billion cash reserve buys time but does not eliminate long-term refinancing and payout risks if Bitcoin remains weak according to market analysis.

What This Means for Investors

For investors, Strategy's stock has become a high-risk, high-reward Bitcoin leverage play under stress according to market analysis. The company remains the largest corporate holder of Bitcoin and a cornerstone of the "Bitcoin on corporate balance sheets" story according to market reports. However, its stock price, premium, and narrative have all been hit hard by the latest Bitcoin sell-off according to market analysis.

Analysts and market participants are closely watching whether the new USD reserve ends up being a smart risk management move or an early warning sign of deeper trouble according to market commentary. For now, the consensus is that MSTR is essentially a levered Bitcoin trade with a growing web of preferred dividends, complex credit instruments, and equity-market dependencies according to financial analysis.