- Strategy holds 2.76% of all BTC, exposing it to significant price and liquidity risks.
- Bitcoin-funded growth pushed Strategy’s stock up 2,930% but raised concerns of overvaluation.
- Heavy debt and possible dilution amplify risk if Bitcoin prices fall or credit tightens.
Strategy’s aggressive approach to Bitcoin accumulation, largely funded by debt, has reignited debate around the sustainability of highly leveraged crypto investment strategies. With its corporate treasury now holding more than half a million BTC, the scale and structure of Strategy’s exposure are raising concerns over risk concentration, market influence, and financial resilience, particularly as Bitcoin’s price fluctuates above the $100,000 mark.
In May 2025 alone, Strategy added more than 24,000 BTC to its treasury through three large transactions totaling over $2.5 billion. The most recent acquisition involved 4,020 BTC purchased for $427.1 million at an average price of $106,237 per coin.
Earlier purchases in the month included 13,390 BTC and 7,390 BTC. These additions have pushed Strategy’s total Bitcoin holdings to 580,250 BTC, currently valued at $61.41 billion, approximately 2.76% of the total Bitcoin supply.
The purchases have been financed by issuing convertible notes worth $7.27 billion and continued equity offerings. The firm recently filed for a 10 billion share increase, which, if approved, would raise capital but also dilute shareholder value.
Stock Gains and Market Sentiment
Strategy’s stock performance has mirrored Bitcoin’s rally. Since announcing its Bitcoin strategy in 2020, shares of Strategy have risen by nearly 2,930%, with gains in the last three months outpacing Bitcoin by 63%. Some investors now view the stock as a leveraged proxy for Bitcoin exposure, despite its premium valuation relative to its underlying crypto assets.
However, analysts are cautioning against interpreting stock gains as a guarantee of long-term success. The company’s high correlation to Bitcoin (measured at 0.8) suggests that any meaningful downturn in the crypto market could significantly impact Strategy’s stock value.
Risks of Leverage and Liquidity Constraints
The structure of Strategy’s treasury management raises several critical risks. Chief among them is price volatility. A sudden or prolonged drop in Bitcoin’s value could expose the firm to steep losses, particularly given the scale of its debt obligations. Rising interest rates or tightened credit conditions could further complicate repayment, especially if Bitcoin enters a bearish phase.
Additionally, liquidity constraints could emerge if the firm is forced to liquidate assets under adverse market conditions. Selling large quantities of Bitcoin in a declining market could accelerate price drops, potentially harming both Strategy’s balance sheet and the broader market.
As one of the largest corporate holders of Bitcoin, Strategy’s financial decisions have systemic implications. A major liquidation event could introduce new volatility into the crypto ecosystem, especially amid high ETF inflows and shifting investor behavior. Recent netflows show BTC inflows at record highs, while ETH continues to see outflows, hinting at redistribution of capital across top assets.
