Bitcoin Surges 13% to $110,000 While Strategy Shares Fall 3%

Since the beginning of this month, Bitcoin has surged by approximately 13%, nearing the $110,000 mark. In contrast, Strategy, a company known for its bitcoin treasury strategy, has seen its shares slip by 3%, trading around $372. This divergence has raised questions about market sentiment towards Strategy, despite its pioneering role in corporate bitcoin adoption.

One significant factor contributing to this performance gap is the increasing number of public companies adopting similar bitcoin strategies. Over 113 public companies globally now hold bitcoin on their balance sheets, with 11 new entrants in the past 30 days. Many of these companies are following Strategy’s playbook, but the firm’s market premium is compressing, suggesting that its early-mover advantage may be fading.

Strategy’s multiple to net asset value (mNAV), which reflects how the market values the company relative to its bitcoin holdings, has dropped to 1.80, one of its lowest points over the past year. This figure is calculated by dividing the enterprise value (EV) by the market value of its bitcoin holdings. The EV includes Strategy’s current market cap, convertible debt, and preferred shares, minus the company’s most recent reported cash balance. A lower mNAV limits Strategy’s ability to issue new equity without significantly diluting existing shareholders, although it remains above 1x, preserving some headroom.

Strategy’s recent purchase of 4,020 BTC, its smallest since May 5, also reveals a significant change in funding structure. The acquisition was financed not only through common stock but also through preferred securities — 81.7% from common stock, 15.9% from STRK, and 2.4% from STRF. This diversification indicates that the company is strategically tapping alternative instruments via its at-the-market (ATM) offering, possibly to mitigate shareholder dilution and optimize capital raising in a compressed mNAV environment.

Bitcoin’s recent surge to unprecedented heights, reaching a new peak of $109,302, has had a profound impact on the broader market. The market value of Bitcoin-focused portfolios has skyrocketed, compelling investors to reassess their strategies. For instance, with Bitcoin trading at $110,000, the portfolio's market value is approximately $63.8 billion. However, the market capitalization of Strategy, a prominent player in the crypto space, sits at $102 billion, indicating a lag in performance relative to Bitcoin's rally.

The surge in Bitcoin's price has also influenced the performance of crypto-related stocks. Institutional investors are increasingly viewing Bitcoin as a strategic reserve amid economic uncertainty, further driving its value. This trend is supported by the growing belief that Bitcoin can act as a modern hedge, similar to gold but with a digital edge. The limited supply of Bitcoin, capped at 21 million coins, adds to its appeal during periods of monetary expansion and rising inflation. Unlike fiat currencies, which can be printed at will by central banks, Bitcoin’s supply is predictable and transparent, governed by code rather than politics.

The recent Bitcoin halving event, which reduced the rate of new BTC entering the market, has also contributed to its upward trajectory. Analysts attribute the rise to a combination of factors, including institutional investment, improved regulatory clarity, and the latest Bitcoin halving event. A realistic near-term target for Bitcoin is $113,000 by June 2025, according to the analyst's forecast.

Despite the strong fundamentals, short-term corrections remain possible. Factors such as a strengthening U.S. dollar, unexpected regulatory shifts, or geopolitical tensions could disrupt the current momentum. However, the overall trend suggests that Bitcoin is well-positioned to benefit from the current economic environment. As the world faces the prospect of long-term price increases and economic shifts, investors may begin re-evaluating traditional portfolios. In this new environment, digital assets like Bitcoin—and to a lesser extent, select altcoins—could play a more central role.

The surge in Bitcoin's price has also had implications for the broader crypto market. Altcoins, especially those tied to real-world use cases or innovative blockchain infrastructure, may also attract investor interest as inflation persists. However, Bitcoin remains the most recognized and widely held digital asset. Its reputation as a “digital gold” makes it a likely first stop for investors hedging against inflation.