This is analysis, not investment advice — and contains no price predictions.

Strategy (ticker MSTR), the software-company-turned-bitcoin-vault run by Michael Saylor, has spent years making a leveraged bet on bitcoin. Now, with bitcoin weak, that bet is being tested — and the company has just rewritten its financial playbook to prove it can hold on.

What Strategy is, and the risk

Strategy is the largest corporate holder of bitcoin — roughly 300,000-plus coins. It bought them not just with cash but by issuing stock, convertible debt and preferred shares — in effect, borrowing against a volatile asset. When bitcoin rises, everything works: the holdings and the share price climb, letting Strategy raise more money to buy more bitcoin. When bitcoin falls, the machine runs in reverse.

That's the root of the "death spiral" fear. If bitcoin drops far enough, the worry goes, Strategy could be forced to sell bitcoin to cover its obligations — including the dividends on its preferred shares and its convertible debt (reported around $6.75 billion) — and that selling could push bitcoin lower still, feeding on itself. The pressure is real: MSTR is down roughly 77% since its latest preferred shares launched in mid-2025 — far worse than bitcoin, which fell about 50% over that span — as the premium investors once paid for Strategy's shares evaporated. Bitcoin is down around 30% in 2026 alone, CoinDesk noted, and Strategy is heading for its 11th losing month in 12.

(Explainer: a convertible bond is debt that can turn into stock; preferred shares pay a fixed dividend and rank ahead of common stock; leverage means using borrowed money to amplify a bet — magnifying gains and losses.)

The new plan

On June 29, Strategy announced a capital-management framework meant to ease those refinancing fears, Cointelegraph reported. The key pieces: authority to buy back up to $1 billion of common stock and $1 billion of preferred shares, a bigger cash buffer, and — most notably — a "Bitcoin Monetization Program" that explicitly allows Strategy to sell up to $1.25 billion of its bitcoin if needed to fund dividends, debt or buybacks. In other words, the once-unthinkable — selling bitcoin — is now a formal tool. Markets initially welcomed the clarity, with the shares bouncing off their lows.

Bulls vs. bears

Analysts don't agree on what it means.

  • The optimistic case: Strategy faces no near-term crunch — supporters point to stress tests suggesting it could survive even a ~55% bitcoin drawdown without forced liquidations, and note there's no major debt deadline until 2027-2028. The plan buys breathing room.
  • The skeptical case: critics argue it postpones the reckoning rather than removing it. The real test, they say, isn't bitcoin's price but whether Strategy can still raise money when markets are stressed — if its preferred shares stay cheap and capital markets freeze, buyback plans won't save it.

Wall Street's targets have drifted down even among bulls: TD Cowen cut its price target (to a reported $260) while keeping a positive rating; another shop trimmed its target too. (These are analyst opinions, not Boursel forecasts.)

Why it matters

Strategy pioneered the "bitcoin treasury company" — a public firm whose main business is holding crypto with borrowed money — and many others copied it. So its strain is bigger than one stock. It lands alongside the record ETF outflows Boursel just covered (about $4 billion left US spot bitcoin ETFs in June), and Strategy's own potential bitcoin sales could add to that selling — the opposite of the stabilizing role crypto's institutionalization was supposed to bring. The deeper lesson is old and universal: leverage amplifies losses as easily as gains. Boursel offers no view on bitcoin or MSTR; the takeaway is that the model built to supercharge a bitcoin bet is now being stress-tested in public — and even its designers have written "sell bitcoin" into the emergency plan.