The world’s largest Bitcoin treasury company isn’t buying much Bitcoin lately. Michael Saylor’s Strategy (MSTR -4.56%) has gone five weeks without a Bitcoin acquisition. Its last reported purchase was during the week of June 15 through June 21, when it bought 520 BTC for $35 million. That’s an average purchase price of $67,068, which is higher than Bitcoin’s price at the time of this writing (July 29).
This pause is another shift in Strategy’s approach, following its Bitcoin sale in late May 2026. It has since reported two more sales in late June and early July. Both moves are a sign that the business model Strategy popularized isn’t working anymore.
Image source: The Motley Fool.
The end of the flywheel strategy
Strategy and the many Bitcoin treasury companies that followed in its footsteps used a “flywheel” strategy. As long as Strategy stock was trading at a premium to its net asset value (NAV), it could issue more equity and use the proceeds to buy Bitcoin. Its “Bitcoin per share” would increase, allowing it to sustain its premium.
A flywheel doesn’t work when Strategy trades at a discount to NAV, because issuing more stock only lowers its Bitcoin per share. Strategy stock trades at 0.60 times its NAV, although that rises to about 1 times NAV when accounting for enterprise value and capital structure obligations.
Still, in Strategy’s current position, selling stock to fund Bitcoin purchases doesn’t make sense. Complicating matters are the other financial obligations it has to manage.
Strategy needs to maintain its cash reserves
Strategy has $1.76 billion in annual dividend payments and interest on its debt. That includes funding the dividend on Stretch, its perpetual preferred stock designed for investors seeking passive income. Strategy raised the Stretch dividends to 12% on July 1, so it requires a significant amount of cash.
While Strategy has a software business, that doesn’t bring in nearly enough money to fund its obligations. The company’s trailing revenue is $490 million.
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Instead, Strategy has elected to maintain cash reserves that can pay at least 12 months of expected annual dividend payments and interest expenses. Its current reserves of $3.75 billion exceed that requirement, covering over two years of expenses.
Strategy isn’t the same investment
Strategy has grown its cash reserves, paused its Bitcoin purchases, and sold Bitcoin multiple times. It’s no longer a company that aims to accumulate as much Bitcoin as possible. As CEO Phong Le put it, “Strategy is evolving from one-way capital issuance to active capital management.”
While the business model has changed, the amount of risk involved with Strategy remains high. The company built its business around an extremely volatile asset, Bitcoin, and relies on a convoluted financial structure to fund hefty preferred stock dividends. If you’re looking for Bitcoin exposure, you may want to stick to buying the cryptocurrency itself or Bitcoin ETFs. Strategy layers on even more risk and volatility, which is exactly what you don’t need when investing in cryptocurrency.