Strategy’s $1.44B Cash Buffer Sparks New Scrutiny as 650,000-BTC Treasury Faces Pressure

Mounting Stress Around mNAV Thresholds and Investor Concerns

TL;DR

• Strategy’s $1.44 billion cash reserve aims to cover dividend obligations but raises questions about long-term sustainability.
• The company’s 650,000-BTC treasury — roughly 3.1% of global supply — is now tied to mNAV risk thresholds that could force selling.
• Analysts warn that a sharp drop in mNAV could trigger a “death-spiral” scenario, stressing both the company and broader crypto markets.

Strategy’s newly built $1.44 billion U.S. dollar reserve has become the centerpiece of a precarious balancing act as the Bitcoin-heavy firm battles a declining share price, widening financial obligations, and a capital structure increasingly dependent on market confidence. The reserve, financed through share issuance, was designed to guarantee at least 12 months of dividend payouts and eventually two years of coverage. That buffer sits alongside the company’s estimated 650,000 BTC holdings—roughly 3.1% of global supply—which continue to dwarf the core software business but now expose the entire enterprise to extreme volatility across every major crypto price index, crypto price, and aggregate coin market cap trend.

Strategy’s internal metric, known as mNAV, has emerged as the critical fault line. Management has acknowledged that a fall toward 0.9—a level now uncomfortably close as the stock extends its multi-month slide—could mathematically force the liquidation of part of its Bitcoin treasury to stabilize cash reserves. That possibility directly contradicts years of public messaging about never selling BTC. Market analysts warn that unloading even a fraction of the company’s 650,000-coin stack would unleash one of the largest supply shocks the crypto market has ever seen, with the potential to destabilize leveraged positions, spot liquidity, and sentiment far beyond Strategy’s own balance sheet.

The company’s obligations deepen the pressure. Annual financing burdens tied to preferred dividends, interest payments, and convertible debt hover near $689 million, creating a structure critics compare to an over-levered algorithmic asset—one that functions smoothly only while Bitcoin trades high and equity markets stay open for fundraising. With the share price down more than 60% year-over-year, Strategy’s equity-financed safety net has become harder to maintain. The firm’s scenario modeling shows how fragile the outlook has become: Bitcoin finishing the year between $85,000 and $110,000 could swing net results between a $5.5 billion loss and $6.3 billion profit, a range that underscores how aggressive the firm’s risk profile has become.

Public critics have seized on the moment. Veteran gold advocate Peter Schiff labeled the structure “a fraud” and predicted eventual collapse as institutional investors reassess the sustainability of the preferred-share payouts that underpin Strategy’s balance sheet. Others point to the growing resemblance between the company’s leverage loop and the feedback dynamics that drove high-profile failures in previous crypto market cycles. 

Strategy continues to buy Bitcoin during market dips, sticking to its long-held treasury thesis, yet the firm now faces a tightening corridor where falling equity valuations, heavier debt obligations, and mNAV thresholds converge. Each leg of this structure relies on stable markets—and a sustained bull cycle in Bitcoin—to avoid a scenario analysts describe bluntly as a potential “death spiral.”

This article has been refined and enhanced by ChatGPT.