Strategy's enterprise mNAV has fallen below 1, indicating its market valuation is less than its Bitcoin reserves for the first time.
Strategy has seen its enterprise market net asset value (mNAV) dip below 1 for the first time, indicating that the market values the company less than its Bitcoin reserves, according to reports.
As of now, the company's valuation stands at approximately $50.4 billion, coinciding with its Bitcoin reserves, which are valued at about $51.1 billion given Bitcoin's current price of around $60,000. This follows a period where the company's capitalization had already been assessed as lower than the value of its BTC reserves based on basic mNAV in December 2025.
“At these levels, issuing new shares becomes dilutive, as the company would effectively be selling equity below the value of its underlying assets,” stated a source.
Implications for Strategy's Financial Model
The decline in enterprise mNAV is significant for Strategy, as it has relied on a premium valuation of its Bitcoin reserves to facilitate share issuance and acquisitions. With the current valuation, the company retains other options for capital management, such as debt and preferred stock, but issuing common stock could lead to shareholder dilution.
Previously, CEO Fong Le indicated that if mNAV fell below 1 and other funding sources were depleted, the company might consider selling Bitcoin, although this would be a last resort.
Between May 26 and May 31, Strategy sold 32 BTC for around $2.5 million at an average price of $77,135 each.
Bitcoin Reserves Remain Highest Among Public Firms
As of June 22, Strategy holds 847,363 BTC, with a total acquisition cost of $64.1 billion and an average purchase price of $75,651 per coin. The most recent purchase was 520 BTC for about $35 million at an average price of $67,068.
With Bitcoin's current trading range, the company's reserves are now valued below their average purchase price, estimated at approximately $50.4 billion based on a closing price of $59,577.82.
Challenges for STRC Preferred Stock
Strategy's financial challenges are extending to its perpetual preferred stock, STRC, which has seen its value decline significantly. Recently, STRC shares fell to a low of around $71.40 before regaining some ground, trading approximately 26% below par value.
The effective yield on STRC has risen to nearly 15%, leading to speculation about a potential increase in the dividend rate. The company has filed with the SEC to transition STRC payments to a semi-monthly schedule and has increased the annual dividend rate by 50 basis points to 12%, effective July 2026.
Additionally, Strategy has launched a Bitcoin monetization program aimed at bolstering dollar reserves by up to $1.25 billion, which could be utilized for dividend payments and share repurchases.
Broader Impact on Bitcoin Treasury Sector
Other firms employing the Bitcoin treasury model are also experiencing similar pressures. Reports indicate that the enterprise mNAV for some companies, such as Japan's Metaplanet, is around 0.9, while others fall below 1. This trend is raising concerns about overall investor sentiment in the cryptocurrency sector, as noted by industry observers.
“MSTR was that one digital treasury company that investors continued to believe in, but that faith is now eroding. We are already seeing this reflected in Bitcoin's price,” remarked a commentator.
In light of these developments, some analysts have suggested that Strategy should pause Bitcoin acquisitions to stabilize its dollar reserves, especially in the wake of declining dividend coverage for STRC.
