Strategy Inc., formerly known as MicroStrategy, has become the most aggressive corporate holder of Bitcoin in the world. The company, now describing itself as a Digital Asset Treasury (DAT) powerhouse, has publicly committed to never selling its Bitcoin. That commitment, however, comes with a steep and growing cost. As of late October, Strategy faces annual obligations of about $689 million, a figure that continues to rise as its holdings and financing commitments expand.
The company’s stock tumbled to its lowest level since April, falling 45% from this year’s peak, now trading around $255 (at the time of going to print), and is down over 53% from its all-time high. Its market capitalization has fallen to $73 billion, a steep decline from the $128 billion it once commanded.
The firm currently holds roughly $66 billion worth of Bitcoin. It is something, the company’s founder Michael Saylor, has used to build his identity around. This reputation doesn’t come cheap. With an ever increasing cash flow the need of the hour, Strategy must shoulder the burden of annual payments to its debtholders and preferred shareholders, in addition to meeting everyday operational expenses related to product support, software subscriptions, and administrative costs.
To preserve its preferred shareholders’ tax advantages, the company also seeks to avoid direct levies, maintaining a ‘return of capital’ structure for dividends. This helps limit duties but increases the pressure to sustain regular dividend payments and debt service through external funding rather than internal profits.
A gift that keeps on taking
As of October 24, Strategy reported $689 million in annualized dividend and debt interest expenses. Company projections suggest that this figure will reach into the billions in coming years as new Bitcoin purchases continue.
Founder and Executive Chairman Michael Saylor has set ambitious ‘BTC Yield’ targets for the company. BTC Yield measures how much additional Bitcoin is accumulated per share, adjusted for dilution. So far this year, Strategy has achieved a 26.1 percent BTC Yield, with a target of 30 percent by December 31.
Much of this yield is driven by continuous capital raises. Strategy has been issuing preferred stock instruments such as STRK, STRF, STRD, STRC, and STRE to finance Bitcoin purchases. These preferred shares offer high dividend yields between 8 and 10.5 percent. While they enable Bitcoin accumulation without direct dilution of common shareholders, they significantly increase annual payout obligations.
If Strategy continues to raise funds at the same pace in 2026, it is expected to purchase billions of dollars worth of additional Bitcoin and add hundreds of millions more in annual dividend commitments.
Operating income versus real cash flow
Strategy’s operating numbers reveal a company heavily dependent on Bitcoin appreciation rather than traditional business earnings. Between January and October 2025, it reported $12 billion in operating income, but most of that came from unrealized gains in its Bitcoin holdings. Actual operating revenue during the same period was less than $355 million.
This imbalance means that Strategy’s ability to meet its obligations depends primarily on its capacity to raise fresh equity. In its Q3 earnings call, the company indicated that it does not plan to issue new debt. Instead, it intends to convert existing liabilities into equity to ease pressure from fixed interest and principal repayments.
Saylor has said that issuing common shares or discretionary-dividend preferred shares is preferable to taking on new debt, since bonds require fixed coupon payments and must be repaid at maturity. Equity sales, however, rely heavily on investor optimism about the company’s ability to increase Bitcoin ownership per share.
The psychology behind mNAV
The company’s valuation depends largely on a unique investor metric known as mNAV, or multiple-to-Net Asset Value. This represents the premium investors are willing to pay for a share of Strategy stock relative to the value of its underlying Bitcoin.
At present, investors are paying about 7 percent more per share than the value of the company’s Bitcoin holdings. When the total enterprise value of bonds and convertible instruments is included, the premium climbs to around 30 percent.
This valuation persists even though shareholders have no legal claim to Strategy’s Bitcoin. The company’s lawyers have clarified that owning MSTR stock does not confer any ownership interest in the BTC the firm holds. Investors, however, continue to pay a premium based on their belief that Saylor’s management will continue to grow the firm’s Bitcoin position faster than dilution can offset it.
The cost of conviction
Strategy has acquired Bitcoin every quarter since the third quarter of 2020. It intends to keep buying indefinitely. This unwavering commitment has transformed the company into a symbol of corporate faith in digital assets, but it has also locked it into rising financial obligations that now approach $700 million per year.
These costs will continue to grow as the company raises more capital to expand its Bitcoin holdings. The success of its long-term strategy depends on investor confidence that Bitcoin’s value will rise faster than the company’s obligations and equity dilution.
For now, the conviction remains absolute. Michael Saylor continues to frame Bitcoin as a superior treasury asset and a long-term hedge against inflation. Yet as Strategy’s debt, dividends, and expenses pile up, the question grows sharper: how long can a company promise to hold forever when the cost of holding never stops increasing?