What Is Strategy (MSTR)? The Bitcoin Treasury Company

Today, Strategy is one of the most important institutions in cryptocurrency, but it didn't start out that way.

Originally called MicroStrategy, the company co-founded by Michael Saylor—one of the most influential figures in the world of Bitcoin—first made its mark in software. Now it's best known for its aggressive strategy of acquiring Bitcoin for its corporate reserves, with Saylor becoming a figurehead for institutional adoption of the asset.

What is Strategy?

Before it added Bitcoin to its balance sheet, Strategy was best known for business intelligence software designed to help companies analyze data for better decision making.

Founded in 1989 by Michael Saylor, Strategy went public on the NASDAQ in 1998 as MSTR. Two years later, Saylor and two other top executives had to settle a case with the SEC, which alleged the company had "materially overstated revenues and earnings from the sales of software and information services."

After a brief spike in 2000, MSTR traded in a tight range for two decades, only moving upwards at the end of 2020—the same year it announced its first Bitcoin purchase.

Until early 2025, Saylor's company operated as MicroStrategy—but dropped the "Micro" in February that year.

Strategy's Bitcoin treasury reserve

In 2020, Strategy adopted Bitcoin as its primary treasury reserve asset. Concerned about the devaluation of the dollar through inflation, Saylor spearheaded a first purchase of $250 million in Bitcoin as a hedge against economic uncertainty.

Saylor wasn't always a Bitcoin bull. Seven years before his company adopted the asset, he tweeted that "#Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling."

In a complete 180°, Saylor billed Strategy's Bitcoin investment as reflecting a belief that the asset "is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash."

He has since committed to "buying the top forever" and setting a price target of $13 million per Bitcoin over 21 years, on the expectation that it takes up a growing share of global capital.

The buying strategy evolved into a machine. Strategy raised short-term debt through convertible notes—which investors can eventually cash in for stock—and used the proceeds to buy Bitcoin. In December 2024, Saylor likened it to Manhattan real estate development, telling CNBC that "every time Manhattan real estate goes up in value, they issue more debt to develop more real estate." Other public companies, among them MARA, Metaplanet and Riot Platforms, adopted the same playbook.

Strategy announced plans in October 2024 to raise up to $42 billion, then passed a shareholder vote in January 2025 for a 30x increase in its Class A common shares. Days later it launched Strike (STRK), the first of a series of preferred stock offerings—later joined by Stretch (STRC), Stride (STRD), Strife (STRF) and Stream (STRE)—each pitched at investors with different appetites for risk.

A fall below the $100 par value of STRC in June 2026 exposed what analysts called a "structural crack" in the flywheel: the longer STRC traded below par, the greater the chance Strategy would be forced to choose between issuing new shares and selling Bitcoin to keep paying its dividend. Broadly, that is what happened. STRC's dive cut off a funding route the company had used to buy Bitcoin.

Strategy's mNAV metric

Strategy's debt-funded buying has drawn scrutiny. In November 2024, Robinhood-backed Sherwood Media outlined the "math problem," with MSTR worth 3x the Bitcoin it held and the potential for forced liquidations in a drawdown.

That premium is measured by mNAV, the company's multiple to its net asset value. It reached 3.89x in November 2024, then fell below 1 as Bitcoin dropped in 2026, meaning the market valued the company at less than its Bitcoin. Over the six months to February 2026, MSTR shares fell around 70%, and the company reported a loss of $12.4 billion for Q4 2025.

Strategy then changed the yardstick. In July 2026 it overhauled its investor metrics, arguing that a shift from convertible debt toward preferred equity required what Saylor called "a new financial language." The centerpiece is "net Bitcoin per share": rather than dividing the whole Bitcoin pile by the share count, Strategy first subtracts what it owes in preferred stock and out-of-the-money convertible debt, leaving what is actually available to common shareholders.

mNAV was redefined to match, as the share price divided by that net figure. The change mattered. Measured the old way, the stock traded at a discount; measured the new way, the same share price sat at roughly parity.

On the old measure, the discount has narrowed since the summer of 2026. Strategy's basic mNAV, which compares the market value of its common shares with its Bitcoin holdings, hit a low of 0.58 on June 26, 2026, according to SaylorTracker data, and recovered to about 0.97 on September 21, 2026, as MSTR peaked. It stood at 0.87 in October 2026, or 0.93 on a diluted basis. Strategy's own dashboard, which uses its redefined measure, put mNAV at 1.12x the same day, meaning the shares traded at a premium on the company's preferred yardstick.

Strategy's USD Reserve and USD Cash account

To avoid being forced into selling BTC, Strategy established a cash reserve in December 2025, kickstarting it with $1.44 billion. It later added to that pile, and in May 2026 used 61% of the buffer to repurchase $1.5 billion in convertible notes.

That reserve has since grown, and in August 2026 Strategy created a second pool beside it. The two are governed differently, with the USD Reserve designated to cover preferred dividends and interest on debt, while the newer USD Cash account carries no such restriction. Strategy describes it as dollar liquidity for general treasury purposes, intended to let management move quickly on "dislocations in the markets for bitcoin or Strategy's securities." Its permitted uses include buying Bitcoin, paying dividends, repurchasing stock and repaying convertible notes.

Since then, USD Cash has mostly gone on buying back STRC. As of October 18, 2026, the USD Reserve held $4.83 billion and USD Cash $447.3 million, down from $1.44 billion in early September 2026.

Strategy's shifting playbook

In May 2026, Strategy revised its long-held "never sell your Bitcoin" philosophy. On its Q1 2026 earnings call, CEO Phong Le said the firm would consider selling if it improved Bitcoin-per-share or helped manage debt and dividend obligations.

"We will sell Bitcoin when it's advantageous to the company," Le said. "We're not going to sit back and just say, 'We'll never sell the Bitcoin.'"

Saylor went further, suggesting Strategy might sell "to inoculate the market—just to send the message that we did it," before clarifying that the goal was to "never be a net seller". Days later, the company sold 32 BTC for about $2.5 million, its first sale since 2022.

In June 2026, Strategy formalized the shift with a "Digital Credit Capital Framework" and a "BTC Monetization Program" authorizing sales of up to $1.25 billion in BTC to bolster cash reserves, fund payouts on products such as STRC, or repurchase securities. CFO Andrew Kang said in a statement that it gave the company flexibility to monetize Bitcoin "when BTC monetization is more advantageous than issuing common equity." Strategy also committed to not issuing common shares to buy Bitcoin unless valued at a premium to its holdings.

It used the program quickly. By mid-August 2026, Strategy had sold 6,948 BTC for roughly $432.5 million since May 2026, about $62,250 a coin, to fund preferred dividends and STRC buybacks. Other firms sold too, with MARA Holdings offloading around 15,000 BTC in March 2026 and Riot Platforms selling more than $250 million.

The selling stopped when the share price recovered. Strategy raised $334 million selling MSTR stock in the week to August 16, 2026 without touching its Bitcoin, then $2.01 billion the following week. The choice between selling Bitcoin and issuing equity now turns on which is cheaper at the time.

Strategy's return to buying

Strategy started buying again in the last week of August 2026, picking up 4,603 BTC for $369.7 million, its first purchase since June 2026, at an average of $80,318 a coin. That was some 29% more than it had received per coin for the Bitcoin it sold over the summer. It paid with proceeds from selling MSTR stock.

The return lasted exactly one week. In the week to September 7, 2026, Strategy bought no Bitcoin, instead spending $176.3 million buying back STRC and doubling its repurchase program to $2 billion. After a second week of buybacks, it resumed buying in mid-September 2026, this time using USD Cash, and by the end of the month had taken its holdings to a record 847,666 BTC, above its June 2026 peak.

Purchases have since slowed to $20 million to $30 million a week, while STRC buybacks have run at close to $200 million a week. On October 19, 2026, Strategy raised the cap on its repurchase program to $3 billion. STRC traded at $99.05 on October 20, 2026, just below its $100 par value, according to Yahoo Finance.

Purchases have been far smaller since. Strategy spent $29 million on Bitcoin in the week it posted a $21 billion third-quarter gain, then $21.5 million and $22.1 million in the two weeks to October 18, 2026. Over the same period it bought back between $176 million and $193 million of STRC each week, and on October 19, 2026, its board raised the cap on the repurchase program to $3 billion. STRC itself traded at $99.05 on October 20, 2026, still just below its $100 par value, according to Yahoo Finance.

Strategy has also proposed that dividends on STRF, STRC, STRK and STRD accrue every calendar day, including weekends and holidays, moving STRC from 24 record dates a year to 365. The company says the change will help dampen volatility in its preferred shares. Common shareholders can vote on it until October 28, 2026, according to a company filing.

The future of Strategy

As of October 20, 2026, Strategy holds 848,517 Bitcoin, acquired for a total of $64.02 billion at an average price of $75,446, according to its latest SEC filing—making it the largest Bitcoin treasury among publicly traded companies, at roughly 4% of total supply. With Bitcoin trading around $82,500, per Decrypt data, the holdings are worth about $70.3 billion, roughly $6.3 billion above cost, by Decrypt's calculation.

The position has swung violently. In July 2026, with Bitcoin near $58,000, Strategy was about $13 billion underwater. As recently as August 17, 2026, at $63,553, it was $9.9 billion down. A five-day rally then took Bitcoin above the company's average cost, where it has stayed since, though only narrowly in mid-September 2026, when Bitcoin dipped to about $75,600. MSTR shares recovered with it, climbing from $91.67 on July 24, 2026 to $168.50 on September 21, 2026, according to SaylorTracker data, before easing back; they traded at $144.65 on October 20, 2026, up 6.3% on the day.

The company's place in the stock market is also under threat. Saylor and Le urged MSCI in early September 2026 to drop what they called a discriminatory index rule; funds tracking MSCI's indexes held 3.1% of Strategy's basic shares at the time. On October 15, 2026, MSCI finalized the rule, treating "non-operating companies" whose balance sheets are dominated by a single asset as ineligible for its Global Investable Market Indexes from the close of November 30, 2026. MSCI will publish the list of affected companies on November 11, 2026, and removal would force index-tracking funds to sell.

Saylor's ambitions remain larger than the balance sheet: in October 2024 he outlined a vision for Strategy as a "Bitcoin bank" with a trillion-dollar valuation, building capital market instruments tied to Bitcoin.

He has pitched the playbook elsewhere too: in December 2024 he told Microsoft's board it could create $5 trillion in value by adopting Bitcoin. Shareholders voted against it.

Editor's note: This story was originally published on January 8, 2025, and last updated with new details on October 20, 2026.