Why MicroStrategy’s Bitcoin Strategy Is Under Scrutiny
In a surprising move, MicroStrategy recently disclosed its largest Bitcoin purchase of the year on January 26, 2026. This marks the company’s fourth purchase in January alone, acquiring 2,932 BTC at an average price of $90,061 per Bitcoin. The sheer amount of this acquisition highlights the company’s continued confidence in Bitcoin, but there are mounting concerns regarding its funding methods and their long-term implications.
The Funding Behind MicroStrategy’s Bitcoin Purchases
MicroStrategy funded its latest Bitcoin purchase through equity issuance. Using capital markets, the company sold 1.57 million shares of common stock, raising $257 million, and an additional 70,201 shares of preferred stock for $7 million. In total, these proceeds covered the $264.1 million used to acquire the Bitcoin.
This method, while effective in facilitating the purchase, raises questions about the sustainability of relying solely on external capital. Using freshly issued shares to fund Bitcoin acquisitions leads to potential dilution risks for existing shareholders, especially when the stock’s value trades at a discount against Bitcoin holdings per share.
Key Metrics: Dilution and Market Pressure
One critical measure of MicroStrategy’s financial strategy is its multiple to net asset value (mNAV). This metric compares the company’s equity valuation to the per-share value of its Bitcoin holdings. As of January 26, 2026, the diluted mNAV stands at 0.94x, indicating the stock trades at a 6% discount to its Bitcoin backing.
The data further shows that recent share issuance has done little to increase Bitcoin exposure per share, with the per-share increase standing at just 0.38% for the month. This highlights a diminishing return for existing shareholders and raises the question: Can MicroStrategy continue its aggressive Bitcoin-buying approach without eroding shareholder value?
The Long-Term Risk for Shareholders
MicroStrategy’s reliance on capital markets makes its Bitcoin strategy increasingly vulnerable. The company has raised $18.56 billion through equity issuance in the past 19 months, issuing over 226 million shares. However, as share dilution accelerates and preferred stock issuance grows, shareholder returns face heightened risk unless Bitcoin prices rise dramatically.
Moreover, preferred stock introduces fixed claims, which further complicates the company’s balance sheet and increases obligations. While the strategy signals strong faith in Bitcoin’s long-term value, it raises alarms about sustainability under current market conditions.
Will the Strategy Pay Off?
While MicroStrategy’s conviction in Bitcoin remains solid, its structural financial choices could undermine shareholder confidence. If equity premiums remain low, Bitcoin accumulation may transition from being accretive to highly dilutive. Such a shift would fundamentally alter the company’s appeal to both existing and potential investors.
As the crypto markets evolve and Bitcoin’s price fluctuates, shareholders should closely monitor how MicroStrategy navigates these challenges. The larger question remains: Can the company sustain its Bitcoin-buying momentum without eroding long-term shareholder value?
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