MicroStrategy/Strategy Inc. (MSTR) and Its Bitcoin Treasury – Deep‑dive report (Oct 6 2025)

Executive summary

MicroStrategy, a business‑intelligence software company, rebranded itself Strategy Inc. in early 2025 and has transformed its balance sheet into the world’s largest corporate Bitcoin treasury.  The company uses surplus cash, at‑the‑market (ATM) equity offerings and multiple series of convertible bonds and preferred shares to accumulate bitcoin.  By 6 Oct 2025 the company held 640 031 BTC, making it one of the largest holders of the cryptocurrency; the cost basis of these coins was about $47.35 billion, while the fair‑value of the holdings exceeded $80 billion when bitcoin traded above $125 000 .  Its aggressive strategy has made MSTR shares a volatile, leveraged proxy for bitcoin price movements.  The following sections examine the company’s holdings, the correlation between MSTR and bitcoin, management’s rationale, analyst perspectives and recent developments.

1 Current Bitcoin holdings (quantity, value, cost and unrealized gains/losses)

1.1  Latest holding summary (Oct 6 2025)

On 6 Oct 2025 bitcoin reached a new record. Reuters reported that bitcoin rose to $125 835.92 and was last $125 253.63 .  That same day, StockAnalysis.com’s price history shows MSTR shares closed at $359.69 .  CryptoSlate summarized Strategy’s Q3 2025 financial update (for quarter ended 30 Sept 2025):

• The company held 640 031 BTC with a cost basis of $47.35 billion (average cost $73 983 per BTC) .
• The carrying value (book value) under the new fair‑value accounting standard (ASU 2023‑08) was $73.21 billion, and the company recorded $3.89 billion in unrealized gains during Q3 .
• As of Oct 6, the bitcoin price of $125 420 valued Strategy’s bitcoin at **$80.26 billion**, so the holdings exceeded the carrying value by $7 billion .
• Outstanding indebtedness was $8.24 billion (mainly convertible notes) and annual preferred‑stock dividends total $638.7 million .

Using the closing price of $125 253.63 from Reuters and 640 031 BTC, the fair value is about $80.17 billion.  Compared with the $47.35 billion cost basis, this implies unrealized gains of ~$32.8 billion before taxes.  The book value ($73.21 billion) suggests deferred tax liabilities reduce reported equity gains to about $7 billion .

1.2  Holdings history and cost evolution

The table below summarizes Strategy’s bitcoin holdings by quarter using the company’s FY2023 Form 10‑K and the 2025 Form 10‑Q (which provides a roll‑forward schedule of bitcoin acquisitions).  Values are aggregated from the filings; carrying value reflects U.S. GAAP accounting (historical cost less impairment until 31 Dec 2024 and fair‑value accounting thereafter).
These data show the company has dramatically increased its bitcoin holdings since late 2023, especially during Q4 2024 and Q1 2025 when large capital raises allowed purchases of more than 300 000 BTC.  The average cost per coin rose from about $31 k in 2023 to ~$74 k by Q3 2025 .  At the Oct 6 price of ~$125 k, holdings have an unrealized gain of roughly $32.8 billion before taxes.

2 MSTR stock–Bitcoin correlation

2.1  Evidence from empirical studies (2020‑2025)

A 2025 CCN analysis used TradingView daily closing prices to calculate the daily Pearson correlation between MSTR and bitcoin.  The article notes that the correlation has remained above 0.8 for years, indicating a strong positive relationship .  MSTR tends to amplify bitcoin’s movements: its daily volatility is about 1.57 × bitcoin’s, and its rolling one‑year beta (sensitivity) ranges 1.31 – 1.41 .  Quantile regression shows MSTR’s beta is near 1.01 during weak bitcoin returns but rises to 1.10 – 1.15 during strong upswings, meaning the stock outperforms in rallies but falls more or similarly in downturns .  The same study reports that since MicroStrategy adopted its bitcoin strategy (Aug 10 2020 – Jul 10 2025), MSTR achieved a Sharpe ratio of 1.57 versus 1.09 for bitcoin and a Sortino ratio of 2.84 versus 1.94 , suggesting better risk‑adjusted returns despite higher volatility.

2.2  Observations from recent market data

On Oct 6 2025 bitcoin closed near $125 253 , while MSTR closed at $359.69 .  Comparing the previous month’s movements shows similar directional trends: bitcoin rallied from ~$110 k to over $125 k, and MSTR rose from about $300 to over $360 (a ~20 % move).  However, the stock also reflects market sentiment on leverage, capital raises and future bitcoin accumulation.  MSTR’s beta above 1 means the stock generally moves more (up or down) than bitcoin, acting like a leveraged call option on bitcoin .

3 Strategic rationale behind the Bitcoin purchases

3.1  Management’s motivation and statements

• Hedge against inflation and cash devaluation.  In 2020, CEO and co‑founder Michael Saylor called cash a “melting ice cube” and argued that bitcoin, with a fixed supply of 21 million coins, is a superior store of value .  The company adopted bitcoin as its primary treasury reserve asset because it expected cash returns to be negative after inflation and believed bitcoin would preserve and grow purchasing power.
• Never‑sell philosophy.  Saylor has repeatedly stated that Strategy is a long‑term holder: “Never. No. We’re not sellers. We’re only acquiring and holding bitcoin … that’s our strategy” .  The company views bitcoin as its corporate treasury asset, similar to digital gold.  Saylor emphasises that volatility is an opportunity and that they will “continue to accumulate bitcoin, financed by convertible notes, preferred stock, and cash from operations” .
• Capital structure to maximize bitcoin exposure.  CFO Andrew Kang said the company uses a combination of convertible notes, at‑the‑market equity issuance and preferred stock offerings (e.g., STRK, STRF, STRC and STRD) to raise funds for bitcoin purchases.  This allows the company to increase its bitcoin exposure while limiting dilution and servicing interest expenses .  The 2025 Q2 earnings release noted that Strategy raised over $10 billion through ATM programs and IPOs during the first half of 2025 .
• Bitcoin yield and shareholder value.  The company introduced a “BTC Yield” metric to measure how quickly it increases the number of bitcoins per share.  CEO Phong Le said that expanding the BTC yield “creates shareholder value” by using capital markets to grow the bitcoin balance sheet .  In Q2 2025, Strategy announced a 25 % BTC‑yield target and emphasised that the July IPO of STRC preferred stock provided high‑yield financing engineered to amplify bitcoin holdings .

3.2  Financing mechanisms and risk considerations

• Convertible notes.  Starting in 2020 the company issued convertible senior notes to fund bitcoin purchases.  The notes carry low interest costs but can convert into equity, diluting shareholders.  VanEck notes that these instruments create optionality for bondholders but increase leverage risk .
• Preferred stock (STRK, STRF, STRC, STRD).  These series pay variable dividends and are convertible into MSTR shares.  They enable the company to raise billions of dollars without immediate dilution but increase dividend obligations (approx. $638.7 million annual cost ) and may dilute common shareholders if converted.
• At‑the‑market equity offerings.  Strategy frequently sells new MSTR shares through its ATM program.  Net proceeds were $2.07 billion in Q3 2025 alone .  These offerings dilute existing shareholders but fund bitcoin purchases and help meet the company’s “never sell” commitment.

4 Analyst opinions and forecasts on MSTR as a Bitcoin proxy

4.1  Leveraged proxy and premium to net asset value

VanEck research describes MSTR as a leveraged call option on bitcoin because the company issues equity and debt to acquire more BTC.  This leverage produces asymmetric upside, causing the stock to outperform bitcoin in rallies but also adding risk in downturns .  The analysis notes that MSTR typically trades at a significant premium to its net asset value; in mid‑2025 the premium was about +112 % over the fair value of its bitcoin plus software business .  VanEck argues that the premium exists because investors anticipate future bitcoin accumulation, there are limited alternatives for U.S. investors seeking regulated bitcoin exposure, and market participants speculate on the company’s capital‑raising strategy .

4.2  Risk and capital‑structure considerations

VanEck cautions that the premium and leverage are double‑edged swords: while they amplify returns when bitcoin rises, they magnify losses when bitcoin falls.  Convertible securities and preferred stock provide optionality for investors but also entail credit risk and dividend obligations .  The research suggests that MSTR common stock offers the highest bitcoin exposure and simplest structure relative to the company’s convertible notes or preferred stock .  Consequently, analysts often view MSTR as one of the few liquid proxies for bitcoin but warn that investors should be comfortable with high volatility and potential dilution.

4.3  Additional commentary

• CCN highlights that MSTR’s correlation with bitcoin remains high (> 0.8) and that the stock’s volatility is ~1.5 × bitcoin’s, making it a “bitcoin beta play” .  The article also notes that MSTR has delivered better risk‑adjusted returns (higher Sharpe and Sortino ratios) than bitcoin itself during the studied period .
• Various analysts and commentators describe MSTR shares as a “leveraged bitcoin ETF” because it offers direct exposure to spot bitcoin plus the ability to raise capital and buy more.  This view gained traction after the SEC approved spot bitcoin ETFs in early 2025, but MSTR continued to trade at a premium due to its active accumulation strategy and limited supply of shares.

5 Recent news and developments (2025)

1. Adoption of fair‑value accounting.  Strategy adopted ASU 2023‑08 on Jan 1 2025, requiring fair‑value measurement of digital assets.  This allowed the company to recognize unrealized gains and losses in earnings.  In Q1 2025 it recorded a cumulative $7.9 billion increase to retained earnings and reported a $5.9 billion unrealized loss on bitcoin due to price declines .  The move makes financial results more sensitive to bitcoin prices.
2. Explosive growth in holdings.  The company’s bitcoin hoard grew from 189 150 BTC at the end of 2023 to 447 470 BTC at the end of 2024 and 640 031 BTC by Sept 30 2025 .  Much of the increase occurred in Q4 2024 and Q1 2025 when the company raised billions through new convertible notes and preferred stock .
3. Q2 2025 earnings results.  In its Q2 2025 earnings release, Strategy reported operating income of $14 billion and net income of $10 billion.  The company held 628 791 BTC at that time with a total cost of $46.07 billion (average $73 277/BTC) and noted a year‑to‑date BTC yield of 25.0 % .  CEO Phong Le emphasised expanding BTC holdings and raising over $10 billion through capital‑markets activities, while Saylor highlighted the launch of the STRC preferred stock as a high‑yield instrument designed to amplify bitcoin exposure .
4. Q3 2025 update (Oct 6 2025).  As reported by CryptoSlate, Strategy recorded $3.89 billion in unrealized gains on bitcoin during Q3 2025, bringing the carrying value to $73.21 billion .  Bitcoin’s rally above $125 k pushed the market value of holdings above $80 billion .  The company purchased 42 706 BTC in the quarter at an average price of $115 959/BTC and financed the purchases through $2.07 billion in ATM stock sales and $2.47 billion in STRC preferred stock .  Strategy’s outstanding debt remained $8.24 billion .

Conclusion

MicroStrategy, now Strategy Inc., has transformed from a software company into a de facto bitcoin investment vehicle.  Through continuous capital raises and a “never‑sell” philosophy, the company amassed over 640 k BTC by October 2025, giving it a market value of roughly $80 billion when bitcoin trades near its new all‑time high .  The firm’s stock (MSTR) maintains a high correlation (> 0.8) with bitcoin and offers leveraged exposure; volatility and beta exceed those of bitcoin, making the stock a high‑risk/high‑reward proxy for investors .  Analysts note that MSTR’s premium and complex capital structure provide upside optionality but also entail dilution and credit risk .  Ultimately, Strategy’s fortunes are tied to bitcoin’s price trajectory, and the company continues to view bitcoin as its primary treasury asset and to raise funds whenever market conditions allow.