MSTR Shares Dip as Strategic Shift to STRC Fuels Volatility, Trading Volume Falls to 39th-Highest

Market Snapshot

Shares of Strategy (MSTR) fell 1.66% on Tuesday, trading at $130 as of 2:30 p.m. ET, following a 26.23% decline in trading volume to $2.39 billion—a drop to the 39th-highest volume on the day. The stock’s performance occurred amid broader market volatility in crypto-related equities, with Goldman Sachs reporting significant short interest against MSTR and Coinbase (COIN). Despite the decline, Benchmark analysts reiterated a “buy” rating with a $705 price target, implying a potential 430% upside from the current level.

Key Drivers

Strategy’s strategic pivot toward STRC as its primary funding vehicle for bitcoin accumulation has emerged as a central narrative driving investor sentiment. Executive Chairman Michael Saylor outlined this shift during Strategy World 2026 in Las Vegas, emphasizing a move away from advocating corporate adoption of bitcoin onto balance sheets. Instead, the company now prioritizes STRC, its perpetual preferred shares, to raise capital for further bitcoin purchases. Benchmark analyst Mark Palmer characterized STRC as the “primary engine” for funding Strategy’s bitcoin holdings, noting that the structure could accelerate growth in bitcoin per share. STRC, which offers an 11% effective annual yield and monthly dividends, has rebounded from a recent low of $90 to trade near its $100 par value, reflecting renewed investor confidence in the instrument’s stability.

The shift aligns with Saylor’s broader “digital credit” vision, framing bitcoin as “digital capital” that can be converted into yield-bearing instruments rather than held outright by corporate treasuries. Under this model, proceeds from STRC issuance are reinvested into bitcoin, increasing holdings and, theoretically, boosting bitcoin per share for equity holders. Benchmark highlighted that Strategy’s common stock trades at a premium to net asset value (NAV), enabling the firm to raise capital accretively. The firm’s capital allocation strategy now prioritizes preserving STRC’s price stability, a move designed to protect the preferred shareholders’ interests while expanding bitcoin reserves.

Despite the strategic clarity, Strategy faces significant unrealized losses on its bitcoin holdings. The company currently holds 717,722 BTC, representing over 3% of the total supply, but reports a $6.7 billion unrealized loss, according to Saylor Tracker. Saylor himself has signaled continued accumulation, recently hinting at further purchases as BTC stabilized near $67,000. However, the stock remains 12.6% lower year-to-date in 2026 and 75.8% below its all-time high of $542. Analysts note that while the company’s mNAV ratio is near 1 and adjusted enterprise value multiple at 1.256 suggest alignment with reserves, the path to profitability remains contingent on bitcoin’s price recovery and broader market sentiment.

The broader crypto market context also weighs on Strategy’s performance. Bitcoin’s pullback from late-2025 highs has pressured digital asset treasury companies, with peers like American Bitcoin (ABTC) reporting Q4 losses due to declining BTC valuations. Meanwhile, Goldman Sachs Research notes that large investors have shorted MSTR and COIN, betting against crypto equities amid regulatory and market uncertainties. Strategy’s ability to navigate these headwinds will depend on its execution of the STRC-driven capital structure and Saylor’s ongoing advocacy for long-term bitcoin holding strategies, which frame short-term volatility as part of the asset’s natural cycle.

In summary, Strategy’s stock performance reflects a mix of strategic repositioning, analyst optimism, and market-wide challenges. The pivot to STRC as a funding vehicle has drawn positive commentary from Benchmark, but the stock’s near-term trajectory remains tied to bitcoin’s price action and the success of its capital-raising initiatives. Investors will closely monitor the firm’s next Bitcoin transaction update and any further guidance from Saylor on scaling the orange bag.