Bitcoin's Plunge Brings Strategy's Holdings to Near Breakeven, but Key Test Lies 18 Months Ahead

Liquidation calls from the sidelines are growing louder for Strategy (MSTR) as bitcoin tumbles and the company's common stock has plunged nearly 70% from last year's peak, calling into question — for some — the firm's ability to continue to meet its obligations.

Throughout 2025, Strategy has relied on perpetual preferred stock as its primary financing vehicle for bitcoin purchases, while mostly using at-the-market (ATM) common share issuance mainly to cover its preferred dividend obligations.

Led by Executive Chairman Michael Saylor, the company issued four U.S.-listed preferred series during the year: Strike (STRK) pays an 8% fixed dividend and is convertible into common stock at $1,000 per share. Strife (STRF) carries a 10% fixed non cumulative dividend and ranks as the most senior of the preferreds. STRD$0.03028 also pays 10% but on cumulative terms and sits junior in the structure. Stretch (STRC), the newest series, debuted in August at $90 with a 10.5% fixed cumulative dividend and now trades just above its offer price.

As of Nov. 21 STRK trades near $73, an 11.1% current yield, with a 10% decline since issuance. STRD has been the weakest performer, falling to about $66 for a 15.2% yield and a 22% total return loss. STRF is the only series still above issue, trading around $94 and delivering roughly an 11% gain, reflecting its senior standing.

Nearly back to breakeven

Bitcoin's plunge over the past weeks has market participants focusing on the roughly $74,400 level at which Strategy — after more than five years of accumulation — would actually be in the red on its bitcoin holdings.

While that's surely an important level for talking points, a decline below $74,400 surely does not mean the company would face a margin call or need to engage in forced sales of any part of its BTC stack.

The nearest structural pressure point is almost two years out on September 15 2027, when holders of the $1 billion 0.625% convertible senior notes receive their first put option.

The notes were priced when MSTR traded at $130.85 and carry a conversion price of $183.19. With the stock now at about $168, holders would be unlikely to convert and would probably seek cash repayment, potentially requiring Strategy to raise or liquidate assets unless the share price rises meaningfully before 2027.

Multiple levers remain

Even if the MSTR share valuation premium to bitcoin holdings (the mNAV) collapses further and maybe even goes to a discount, Strategy still has a clear path to cover the annual preferred dividend bill.

The company can continue to issue common shares via ATM offerings, or sell small slices of its bitcoin treasury, or even pay dividends in-kind with newly issued stock.

This isn't to say all is well. While preferred dividends are not at immediate risk, use of any of the above options would surely dent investor confidence in Strategy even further, likely putting to an end — for at least a temporary time — any efforts to raise additional capital for more bitcoin purchases.