HARD‑CORE PLAYBOOK: MSTR ⇄ BTC

HARD‑CORE PLAYBOOK: MSTR ⇄ BTC

TL;DR

• MSTR is a levered, premium‑sensitive proxy for BTC. You’re trading Bitcoin + human narrative + capital‑markets engineering.
• Edges come from premium cycles (mNAV), capital raises, and trend momentum.
• Risk is real: premium collapse, dilution, debt/pref overhang, key‑person risk.
• Base: own some spot BTC/ETF. Turbo: layer MSTR when the premium is reasonable and trend is up. Trim into froth.

1) Know the machine you’re driving (facts to anchor you)

• BTC held: ~639,835 BTC as of Sept 22–23, 2025.  
• Basic shares outstanding: ~286.7M as of Sept 21, 2025 (company table). That’s ~0.00223 BTC per share (~223k sats).  
• Convertible notes: Company issued $2B 0% converts due 2030 (Rule 144A) with $433.43 initial conversion price. Capital used to buy more BTC.  
• Preferred (“STRD”): Company sold ~11.76M shares at $85 (10% Series A perpetual), raising ~$1B; proceeds aimed at BTC accumulation.  
• Rebrand: MicroStrategy operates d/b/a “Strategy” (ticker still MSTR).  
• Premium (mNAV): Track MSTR mNAV (market cap vs. BTC holdings value). Third‑party dashboards show it fluctuating (e.g., ~1.28+ at times). Use it to avoid overpaying.  

Key idea: MSTR price ≈ mNAV × (BTC holdings × BTC price) ÷ shares.

You’re long BTC and long the premium (mNAV).

2) When to lean in vs. lay off (simple, strict rules)

Accumulation (sane premium):

• Add MSTR when mNAV is modest (e.g., ≤ ~1.2–1.3) and BTC trend is up on your timeframe. (Heuristic, not gospel.)
• Prefer base BTC/spot ETFs when mNAV is stretched or you don’t want premium risk.

Trim / rotate:

• If mNAV blows out (e.g., ≥ ~1.5–1.6), peel some MSTR and rotate to BTC/spot ETF. Lock in premium expansion while keeping BTC beta.

Avoid FOMO peaks:

• Premium spikes can mean narrative > math. Chasing here = volunteering for a fast 20–40% give‑back if mNAV mean‑reverts.

(Live mNAV: check company + third‑party dashboards before every decision.) 

3) Three concrete strategy “modes”

A) Core + Turbo (default for most builders)

1. Core: 50–80% of your BTC‑beta via spot BTC or a spot ETF (IBIT/FBTC/etc.).
2. Turbo: 20–50% via MSTR only when mNAV reasonable + trend up.
3. Trim Turbo when mNAV froths; keep the Core.
   Why: You get compounding + narrative upside without letting premium risk dominate.

B) Premium Cycle Trader (active)

• Buy MSTR when mNAV compresses (blood on the tape).
• Rotate to BTC/ETFs when mNAV expands hard.
• Repeat.
  Why: You’re harvesting the story premium mechanically.

C) Barbell

• Left side: pure BTC/ETF for durability.
• Right side: small, aggressive MSTR slice for upside pops.
• Middle: nothing.
  Why: Keeps the thesis alive and survivable.

4) Guardrails (don’t blow up your future self)

• Position sizing: Treat MSTR beta > BTC because of (a) operating leverage (debt/pref), (b) premium cycles, (c) ongoing security issuance. Cap MSTR so a −40–60% drawdown doesn’t derail your plan.
• Liquidity: Use limit orders; accept partial fills. Avoid market buys into parabolic days.
• Timeframe: If you can’t check mNAV and flows weekly, keep MSTR a minority of your BTC exposure.
• Dilution reality: Converts, ATM equity, and preferreds are features, not bugs. They can be accretive if used above NAV—but still dilute. Stay eyes‑open.  
• Hedging (advanced): Protective puts on MSTR or rotate to BTC on vertical spikes. (Options are complex—know Greeks and expiries before touching.)

5) Math you can use (fast sanity checks)

A) Sats‑per‑share (ex‑any liabilities):

• With ~639,835 BTC and ~286.7M basic shares, one MSTR share ≈ 0.00223 BTC (~223k sats).
  
  • If BTC = $120k, that’s ~$268 BTC‑value/share before any premium/discount.  

B) Premium reality (mNAV):

• mNAV = (MSTR market cap) / (BTC holdings × BTC price).
• If mNAV = 1.30, you’re paying ~30% above pure BTC value per share (before considering debt/pref/other assets). Use that as your “how spicy is this?” gauge.  

C) Why MSTR can move more than BTC

• A simplified sensitivity (holding mNAV constant):
  \frac{dS}{S} \approx \frac{B\cdot P}{B\cdot P – \text{Net Liabilities}} \cdot \frac{dP}{P} \quad + \quad \frac{d(\text{mNAV})}{\text{mNAV}}
  The first term > 1 when there’s net debt/pref; the second term is the story premium expanding or compressing.
• Practically: BTC up + premium up ⇒ MSTR outruns BTC. BTC down + premium down ⇒ MSTR underperforms. (That’s the bargain.)

6) Entry & exit checklist (run this before you click)

Before BUYING MSTR

1. BTC trend: Up on your timeframe? Yes/No.
2. mNAV: ≤ ~1.2–1.3? (If higher, consider waiting/rotating to BTC/ETF.)  
3. Funding moves: Any fresh convert/preferred/equity issuance? Price/terms accretive or dilutive? (Company press/SEC.)  
4. Size: If it gaps −40%, are you okay? If not, cut size.
5. Plan: Pre‑commit a trim zone if mNAV ≥ ~1.5–1.6 or parabolic RSI.

Before TRIMMING/ROTATING

1. mNAV froth (≥ ~1.5–1.6).
2. Vertical move without base.
3. BTC momentum stalling or negative funding/issuance surprise.

7) Where to monitor (bookmark these)

• Company dashboards: holdings, purchases, capital raises, live metrics.  
• Third‑party mNAV & holdings trackers: independent cross‑checks.  
• Latest holdings news: incremental buys often posted by crypto media.  

8) Sample play (illustrative, not personalized advice)

• Core: 70% BTC (or spot ETF).
• Turbo: 30% MSTR only when mNAV ≤ ~1.3 and weekly trend up.
• Risk: Hard stop or mental stop at −25% on the Turbo sleeve or auto‑trim if mNAV hits ≥ 1.55.
• Discipline: Rebalance quarterly; review issuance events (converts/pref).  

Final word

Be bold—never blind. Track mNAV, watch the issuance cadence, and respect drawdowns. MSTR can feel like “the new Bitcoin” in bull phase—because you’re riding BTC + premium + financing flywheel—but it cuts both ways. Own the process, and you’ll own the outcome.

Educational only—this isn’t personalized investment advice. Markets carry risk.