TLDR
- Strategy’s mNAV dropped to 1.174, marking the lowest level since February 2024.
- The company holds 640,031 BTC valued at $75.4 billion amid a weakening market.
- Falling mNAV signals potential financial strain for companies holding Bitcoin.
- Strategy faces capital-raising challenges as Bitcoin’s value declines further.
On October 10, 2025, Strategy’s market net asset value (mNAV) fell to 1.174, marking the lowest level since February 2024. The decline poses serious concerns about the company’s ability to sustain its Bitcoin holdings strategy. This drop follows a broader downturn in the cryptocurrency market and raises alarms about the sustainability of corporate Bitcoin treasury models. Strategy’s shares have also seen a 3% decrease, which adds to the growing concerns.
Falling mNAV Reflects Growing Risk
Strategy’s mNAV decrease to 1.174 indicates that the gap between its market capitalization and the actual value of its Bitcoin holdings is narrowing. A lower mNAV typically reflects weaker financial health, especially for companies like Strategy that rely heavily on their Bitcoin assets. In this case, the company holds 640,031 BTC, valued at around $75.4 billion, but the share price has not reflected this value.
Geoffrey Kendrick, the head of digital asset research at Standard Chartered, emphasized the importance of maintaining an mNAV above 1.0. He stated, “Values below this threshold signal a weakening balance sheet and may lead to consolidation.” The company’s market cap, now at $88.4 billion, faces downward pressure due to this compression between its Bitcoin holdings and market valuation.
Pressure from PIPE Financing Structures
Strategy, like other companies in the digital asset space, faces increasing pressure from its use of PIPE (Private Investment in Public Equity) financing. PIPE structures allow for discounted issuance of shares, which can lead to significant losses for existing shareholders once lockup periods expire.
A recent report highlighted that Bitcoin treasury stocks tend to align with these discounted PIPE issuance prices, leading to significant losses, sometimes up to 55% for current investors.
The feedback loop created by these discounted stock issuances is detrimental. When PIPE investors sell their shares post-lockup, it adds selling pressure on the stock. This, in turn, further compresses the market’s premium on Strategy’s Bitcoin holdings. The result is a cycle where the company’s share price fails to match the true value of its Bitcoin assets, deepening the mNAV decline.
Consequences of Falling mNAV
Maintaining a premium to Bitcoin holdings is vital for companies to raise capital. As Strategy’s mNAV falls below 1.0, the company may face challenges raising funds for additional Bitcoin purchases or servicing its debts. The current situation is creating a bottleneck where Strategy cannot issue equity at attractive prices, which is crucial for further expansion or debt management.
This trend is not just a temporary setback. If the mNAV continues to hover below 1.0, it could create long-term difficulties for Strategy. Without the ability to secure capital at favorable terms, the company may struggle to maintain its Bitcoin strategy. Furthermore, other treasury companies in the crypto space could face similar challenges if the mNAV continues to drop.
Market Conditions and Future Outlook
Bitcoin’s recent decline in value, which is currently trading at $117,824, has added to the pressure. The wider crypto market is experiencing weakness, and the impact on companies like Strategy is evident. A persistent decline in mNAV could trigger further financial instability, especially if Bitcoin’s price does not see a substantial recovery.
For now, Strategy’s situation remains under close scrutiny. While the company is not yet in immediate danger, extended periods below an mNAV of 1.0 could limit its ability to raise funds and service debt. As the company navigates these challenges, the future of its Bitcoin treasury strategy appears uncertain, with many analysts watching for signs of a market turnaround.
