Strategy Stock Volatility Sinks to Historic Lows, Possibly Making Shares Less Attractive

Disclaimer: The analyst who wrote this article has shares in Strategy (MSTR)

Strategy (MSTR) is currently experiencing its lowest 10-day realized volatility since it first added bitcoin {BTC} to its balance sheet in 2020, according to Jeff Park, Head of Alpha Strategies at Bitwise Asset Management.

Realized volatility refers to the actual historical movement of an asset's price over a specific period, in this case ten days. It is calculated using past price data and indicates how much the price has fluctuated in reality, as opposed to how much it is expected to fluctuate in the future.

In addition to subdued historical price swings, MSTR’s implied volatility (IV) currently sits at 48.33 percent, which is among the lowest levels recorded for the stock in recent years. Implied volatility reflects the market’s forecast of a stock’s future volatility, derived from options prices. A lower IV suggests the options market is anticipating smaller price movements going forward. For comparison, MSTR’s IV peaked at 225% in November 2024, during a sharp rally in bitcoin prices following Donald Trump's U.S. presidential election victory. At that time, bitcoin traded above $95,000 and MSTR’s share price surged from $350 to a high of $525. As of now, MSTR shares are trading at $367.

MSTR currently holds 592,345 BTC, but last week added just 245 BTC, marking its smallest weekly purchase since March. This slowdown in accumulation may suggest a saturation point, particularly as other public companies globally begin to adopt bitcoin treasury strategies.

Furthermore, capital flows appear to be rotating from MSTR to smaller bitcoin-holding companies, many of which are experiencing strong performance in both share price and trading volume. Among them are Canada's LQWD Technologies Corp, which has risen about three-fold in recent days on its BTC treasury strategy.

Notably, this marks the fourth consecutive week in which MSTR has not utilized its at-the-market (ATM) equity offering program. As a result, the company now trades at a 1.83x multiple to its net asset value (NAV) in bitcoin terms, known as mNAV. This multiple is calculated by dividing the company's enterprise value by the market value of its bitcoin holdings.

Is MSTR yesterday's news?

Led by Executive Chairman Michael Saylor, Strategy has benefited significantly in recent years from the company’s status as a high-beta, high-volatility proxy for bitcoin. This elevated volatility made MSTR particularly attractive to options traders and speculators, enabling outsized gains on both the upside and downside compared to BTC itself.

However, as MSTR’s volatility compresses, that appeal may diminish. With less price movement, traders, investors, and speculators could begin reallocating capital to other, more volatile bitcoin-linked equities or assets that offer greater trading opportunities.

In response, Strategy has also leaned into alternative financing strategies, including at-the-market offerings tied to its perpetual preferred stock tickers, STRK and STRF. These fixed-income products represent a strategic pivot, but whether they gain meaningful traction remains to be seen.