Strategy (MSTR): A turning point from a software company to a focused Bitcoin fund—Is this a smart bet?

From Software Business to Massive Crypto Treasury

The days of MicroStrategy as an enterprise software provider are a thing of the past. Under the leadership of Michael Saylor, the company is now known as Strategy (MSTR) and has completely shifted its business focus, transforming into the largest Bitcoin holder in the world.

A notable turning point occurred in January 2026 when Bitcoin reached a price of $96.88K with a 24-hour volatility of +2.17%. This strategic decision by Strategy reflects a completely new approach—shifting from generating cash flow through software products to accumulating digital assets.

Major Losses from Price Volatility—A Warning Sign

In Q4 2025, Strategy had to record an unrealized loss of up to $17.44 billion. This followed a 25% drop in Bitcoin’s price in the previous quarter, exposing the risks of the company’s Bitcoin-centric strategy.

This fluctuation is not the first. Just one quarter earlier, Strategy reported an unrealized gain of $3.9 billion. The stark difference between profit and loss demonstrates the instability of a single-asset concentration model.

Highlight: A new accounting rule implemented from the beginning of 2025 requires Strategy to value Bitcoin at market price each quarter. This is a key factor behind the significant fluctuations in the reports.

Pressure on MSTR Shares—The Market Is Unforgiving

MSTR shares experienced a tough period, declining 53% in Q4 2025 and losing 66% from their peak. Investors are concerned about the company’s ability to manage debt and pay dividends without a stable cash flow from operations.

To address liquidity issues, Strategy decided to sell shares to build a cash reserve of up to $2.19 billion. However, the company continues to actively invest in Bitcoin, purchasing an additional $116.3 million worth in early January—a move demonstrating commitment to its long-term strategy.

Currently, Strategy holds approximately $60 billion worth of Bitcoin, while its market capitalization is only $47 billion. This creates an interesting mismatch: the asset value exceeds the market valuation of the entire company.

Financial Health—Warning Signs from Credit Agencies

S&P Global Ratings rated Strategy’s credit at B-minus with a stable outlook in October 2025. However, S&P analysts highlight a fundamental contradiction: Strategy’s assets are Bitcoin, but its debts and dividends must be paid in cash.

This creates a significant risk—Bitcoin does not generate income to cover periodic payments. The company’s core software business is projected to generate only a 1.2% profit margin in 2025 and continues to struggle with stable profitability.

In the first half of 2025, Strategy’s pre-tax profit reached $8.1 billion, mostly from revaluing Bitcoin rather than core operations. The company also manages a $5 billion convertible bond due in 2028, which is currently in a loss position.

Worst-Case Scenario—If Bitcoin Continues to Decline

If Bitcoin fails to reach expected levels and the crypto market continues to correct, Strategy may be forced to sell Bitcoin at lower prices to restructure debt or meet payments. This could lead to serious financial consequences.

The company has set aside $1.44 billion in cash to pay dividends and upcoming interest payments. This fund is sufficient to cover 21 months of payments. However, if liquidity becomes strained, Strategy may face difficult decisions.

Bitcoin’s Position—A Full Bet

Strategy currently controls over 3% of all Bitcoin mined worldwide, making it the largest Bitcoin holder. The company’s average purchase price for Bitcoin is around $75,000, still below the current market price of $96.88K, providing a certain cushion.

However, in October 2025, analysts expected Bitcoin to reach $150,000. This forecast was revised downward to $85,000–$110,000 after Bitcoin dropped from $111,612 to a low of $80,660.

Long-Term Outlook—Projections through January 2026 and Beyond

The future of MSTR shares is closely tied to Bitcoin’s price volatility. Historical data shows: from $14 in January 2023, MSTR stock rose to $450 in July 2025, but also experienced sharp declines during market corrections.

Out of 16 analysts tracking MSTR, 13 rate it a “Strong Buy,” one recommends a “Moderate Buy,” and two suggest holding. The average target price among analysts is $486.29, implying nearly 200% upside from current levels.

The big question remains: Will Strategy continue to be supported by capital markets as traditional financial indicators show their position becoming more fragile? And if the crypto market pauses or enters a downturn cycle, can Michael Saylor’s comprehensive strategy withstand the pressure?