MSTR can behave like ~2× Bitcoin (sometimes more, sometimes less, sometimes it fails hard) because it stacks three separate amplifiers on top of BTC:

  1. Financial leverage (debt + preferred)
  2. Reflexive premium (mNAV / multiple expansion & contraction)
  3. BTC-per-share accretion (BPS goes up over time if financing is “accretive”)

If you understand those 3, you understand the whole game.

1) The core equation: why MSTR can outrun BTC

A clean way to model MSTR’s equity behavior is:

\text{MSTR return} \approx \text{BTC return} + \Delta \ln(\text{BTC-per-share}) + \Delta \ln(\text{premium multiple})

Where:

  • BTC-per-share (BPS) = BTC holdings ÷ assumed diluted shares outstanding (Strategy’s preferred KPI framing).  
  • Premium multiple is basically what the market is willing to pay above the “BTC backing” concept, often discussed as mNAV / premium to BTC NAV (definitions vary; Strategy has a specific definition).  

So MSTR beats BTC when either:

  • it increases BTC-per-share (you own more sats per share over time), and/or
  • the market bids up the premium multiple (mNAV expands), and/or
  • leverage makes equity more sensitive than 1:1.

2) Layer 1: Financial leverage turns BTC moves into bigger equity moves

Strategy has stacked BTC on the asset side, and then financed it with:

  • Convertible debt (fixed claim with equity conversion upside)
  • Perpetual preferred stock (senior to common, dividend obligations, generally no maturity)

From their Q3 2025 10‑Q, outstanding convertible notes (as of Sept 30, 2025) included:

  • $1.0B 0.625% due 2028
  • $3.0B 0% due 2029
  • $0.8B 0.625% due 2030A
  • $2.0B 0% due 2030B
  • $603.7M 0.875% due 2031
  • $0.8B 2.25% due 2032  

That’s ~$8.2B principal sitting above the common stock.

Also, the same 10‑Q shows multiple preferred series with redemption value / liquidation preference that sit above common equity. 

Why this mechanically “leverages” BTC

If BTC assets rise, the debt and preferred claims don’t rise dollar-for-dollar with BTC. The residual (common) can rise faster.

A simplified intuition:

\text{Equity} = \text{BTC assets} – \text{senior claims}

So if senior claims are meaningful, equity becomes a levered residual.

But there’s more…

3) Layer 2: The premium / mNAV is a volatility-driven turbocharger

Even if you strip leverage, MSTR isn’t priced like a boring holding company.

Strategy’s own mNAV definition (important!)

In their free-writing-prospectus style materials, Strategy defines mNAV as:

  • mNAV = enterprise value ÷ “Bitcoin NAV”
  • Enterprise value = (market value of all common shares) + (principal debt) + (notional preferred) − (cash)  

And they explicitly warn: this “Bitcoin NAV” is not traditional NAV and is not net of debt / preferred / obligations. 

Why the premium expands in bull markets

Galaxy’s write-up explains the basic reflexivity:

  • These BTC treasury companies can raise capital (ATM equity, convertibles, preferred) and buy more BTC.
  • When the stock trades at a premium to BTC NAV, issuing shares can be BTC-per-share accretive (more on that next).
  • That “capital access” + “future buying power” gets priced in as a premium.  

This premium is not stable. It’s basically market mood + liquidity + growth expectations.

VanEck goes even more aggressive: it frames MSTR as effectively a call option / convex BTC proxy driven by recursive financing + volatility. 

4) Layer 3: BTC-per-share accretion is the compounding engine

This is the part most people miss.

Strategy tries to increase Bitcoin Per Share (BPS) over time. 

The “accretive issuance” trick

If MSTR trades at a premium to its BTC backing, then:

  • Sell $1 of stock…
  • Buy >$1 of BTC per existing share (because the stock is overpriced relative to BTC-per-share)
  • Result: BTC-per-share increases (despite dilution)

Galaxy describes this loop directly (premium → raise capital → buy BTC → narrative strengthens → premium persists). 

Strategy even formalized this thinking: in the Q3 2025 release, they describe mNAV-based thresholds for when they’ll issue common stock to buy BTC (more aggressive issuance at higher mNAV). 

Real numbers: sats-per-share exploded since 2020

From Strategy’s own shares dashboard:

  • 12/31/2020: 70,469 BTC and 124.510M assumed diluted shares
  • 01/19/2026: 709,715 BTC and 362.606M assumed diluted shares  

That implies (math from those disclosures):

  • ~56,597 sats per diluted share (2020)
  • ~195,726 sats per diluted share (01/19/2026)

That’s about 3.46× more BTC-per-share than when this strategy started.

That alone is a monster reason MSTR can outrun BTC over long windows: you’re not just riding BTC price — you’re (sometimes) getting more BTC exposure per share over time.

But it’s not magic — BPS can also go down

Strategy itself says they sometimes use common ATM for things like paying obligations/dividends, which can increase diluted shares without a matching BTC increase. 

So BPS is a strategy KPI, not a law of nature.

5) A live “sanity check” snapshot right now

Inputs:

  • BTC ≈ $89,310
  • MSTR ≈ $163.53
  • BTC holdings 709,715 (as of Jan 19, 2026)  
  • Assumed diluted shares 362.606M (as of Jan 19, 2026)  

Gross BTC-per-diluted-share ≈ 709,715 / 362.606M = 0.001957 BTC/share ≈ 195,726 sats/share. 

At $89,310 BTC, that gross BTC backing is about:

  • 0.001957 × 89,310 ≈ $174.8 per diluted share

So MSTR at $163.5 is about 0.94× that gross BTC-per-diluted-share value.

⚠️ Critical caveat: Strategy explicitly warns that these BTC-per-share and “Bitcoin NAV” style metrics do not account for liabilities and preferred seniority, and common stock is junior to those claims. 

So “gross BTC backing” is not “what you’d get” in liquidation.

6) The 8-K shows the machine in motion (this is the “BTC reactor”)

In the Jan 20, 2026 8‑K:

  • They sold 10,399,650 shares of MSTR and raised $1.827B net proceeds
  • They also sold 2,945,371 shares of STRC raising $294.3M net
  • Total net proceeds shown: $2.125B
  • They used that to buy 22,305 BTC for ~$2.125B at avg ~$95,284  

That is the playbook in one week:

sell securities → buy BTC → (try to) increase BPS + reinforce premium narrative.

7) So why do people call it “2× BTC”?

Because in strong BTC bull regimes, all 3 amplifiers can align:

  1. BTC goes up
  2. premium / mNAV expands (risk-on reflexivity)  
  3. they raise capital into the strength and grow BTC-per-share over time  

Strategy itself has explicitly claimed (in investor materials) that since the start of the BTC treasury strategy in 2020, MSTR’s performance “outstripped bitcoin by nearly 2x” (their framing). 

But don’t mistake that for a constant ratio.

8) The dark side: why “2×” can flip into “underperform BTC hard”

When BTC chops or drops:

  • Premium compresses (mNAV falls)
  • Volatility bid fades (option-like upside gets repriced)
  • The market starts caring about:
    • dividend burdens,
    • refinancing risk,
    • dilution to fund obligations, not BTC accretion  

Galaxy nails the fragility: the model works best while the premium exists; once you’re near NAV, equity issuance becomes much less attractive. 

So MSTR is not a clean “2× ETF.” It’s a regime-dependent convex instrument.

9) The hardcore takeaway: what actually drives “MSTR ≈ 2× BTC” on a given stretch

If you want to diagnose it like a savage:

A) BTC-per-share (BPS)

  • Rising = fuel for sustained outperformance
  • Flat/down = dilution/obligation drag

(Strategy publishes the share and BTC figures used for this.) 

B) mNAV / premium

  • Expanding = market is pricing the “BTC factory” higher
  • Contracting = market is pricing it like a stressed holding company

(Strategy defines mNAV and even uses it as an issuance trigger.) 

C) Capital markets access

  • If they can issue convertibles/preferred cheaply → they can keep buying BTC
  • If markets shut → the reflexive loop breaks

If you want the visuals from earlier again, here they are:

If you tell me what time window you care about (e.g., “this cycle,” “since Aug 2020,” “since ETFs launched,” “last 12 months”), I’ll break down exactly which of the 3 engines dominated in that window and why.