Bitcoin Treasury Model Loses Favor as Prices Plunge

Michael Saylor's 'bitcoin treasury model' was once hailed as a brilliant strategy for turning corporate balance sheets into digital assets. The model, which used debt and preferred stock to amplify exposure to Bitcoin, was so successful that it became a blueprint for dozens of other companies.

The numbers looked compelling during the bull market. But in a bear market, they look much different. Bitcoin has fallen 52% from its peak, while the S&P 500 has gained approximately 72% over the same period. Strategy's shares have lost about 82% from their peak.

What's more, Strategy's enterprise mNAV, which includes debt and perpetual preferred stock, less U.S. dollar reserve holdings, recently crossed below 1.0 for the first time. This means that the company's total obligations now exceed its Bitcoin holdings, limiting future financing options.