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MicroStrategy’s Valuation Falls Below the Value of Its Bitcoin Holdings

MicroStrategy’s mNAV has slipped below 1 for the first time, which could make new share issuance dilutive. The company’s valuation is now below the value of its Bitcoin reserves.

By Mike Hesp
• 2 min read
MicroStrategy’s Valuation Falls Below the Value of Its Bitcoin Holdings

Key Takeaways

  • MicroStrategy is now valued below the value of its Bitcoin holdings for the first time, after mNAV dropped under 1.
  • The stock fell to around $82, leaving enterprise value at about $50.4 billion versus roughly $51.1 billion in Bitcoin reserves.
  • New share issuance could now be dilutive, and the move underscores the risks of valuing companies mainly on their Bitcoin holdings.

MicroStrategy, the Michael Saylor-led company, is now trading at a valuation below the value of its Bitcoin holdings. For the first time, its enterprise multiple to net asset value, or mNAV, has slipped under 1, meaning the market is valuing the company at less than the worth of its Bitcoin reserves.

Valuation and Impact on Capital Raising

MicroStrategy’s stock has fallen to around $82 (€72), roughly 85% below its November 2024 peak. That drop has pulled the company’s enterprise value down to about $50.4 billion (€44.2 billion), while its Bitcoin reserves are worth about $51.1 billion (€44.8 billion) at a Bitcoin price of $60,000 (€52,600). At this level, issuing new shares could be dilutive, since the company would effectively be selling stock below the value of the assets behind it.

mNAV is calculated by dividing enterprise value by Bitcoin reserves. Enterprise value includes the market value of all outstanding common shares, plus total debt and preferred shares, minus the USD reserve. MicroStrategy can still issue shares, but doing so at this valuation could invite criticism, especially given that earlier Bitcoin purchases already caused dilution and frustration among some investors.

Comparison With Closed-End Investment Funds

MicroStrategy’s valuation now looks a lot like that of a closed-end investment fund. Products such as the Grayscale Bitcoin Trust before its conversion to an ETF often traded above the value of the Bitcoin they held when demand was strong, then slipped to a discount when sentiment cooled. That usually happens because closed-end funds lack a strong redemption mechanism to keep market price and underlying value aligned.

MicroStrategy is different, though, because it has more ways to manage its balance sheet. The company can issue debt or shares when the move is accretive, refinance or redeem securities, generate operating cash flow through its software business, and actively adjust its capital structure. That gives it more flexibility than a traditional closed-end fund.

Relevance for European Investors

For European crypto investors, this is a reminder of the risks that come with companies whose value depends heavily on Bitcoin holdings. It shows how quickly market sentiment can shift, and how a company’s valuation can even fall below the value of the crypto on its balance sheet. That can change how these firms raise capital and how investors think about their place in a volatile crypto market.

The pressure on MicroStrategy’s valuation also fits into a broader pullback in digital asset treasuries. In a separate article, it was noted that institutional demand for Bitcoin has collapsed as corporate buying slowed and spot ETFs continued to see outflows.

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