The post Strategy’s 66% fall v. Bitcoin’s strength – Is leverage finally catching up to $MSTR? appeared on BitcoinEthereumNews.com.

Once Bitcoin showed minor weakness, leverage and premium trades unraveled, pushing Strategy (Formerly known as MicroStrategy) sharply away from Bitcoin’s underlying performance. Strategy ($MSTR) has declined by roughly 66% over the past six months, erasing close to $90 billion in market capitalization by 26 December 2025. The decline occurred even as Bitcoin remained relatively resilient, highlighting a widening disconnect between the asset and its corporate proxy. Source: Ted Pillows on X The sell-off coincided with the collapse of Strategy’s long-standing NAV premium, aggressive share issuance, and growing concerns around leverage, index eligibility, and balance-sheet complexity. As these risks accumulated, investors appeared increasingly unwilling to pay for narrative-driven leverage. So, what exactly was the market repricing here? Trade gets repriced as investors reassess leveraged Bitcoin exposure Markets increasingly treated Strategy as a leveraged financial structure rather than a straightforward Bitcoin proxy. Strategy holds approximately $60 billion worth of Bitcoin [BTC] and yet, its equity has been trading at a 20–25% discount to that underlying value. This reversal is evidence of a clear shift in how investors have priced leverage, optionality, and risk concentration. Talking about leverage, once the NAV premium disappeared, downside exposure accelerated. What once amplified returns instead magnified losses, reinforcing investor caution during periods of stress. When the NAV premium collapses, leverage stops working Premium-driven trades often unwind rapidly once confidence and liquidity conditions deteriorate. Historically, Strategy traded above the value of its Bitcoin holdings, reflecting leverage and perceived strategic advantage. By late December, that premium not only vanished but inverted, signaling structural repricing rather than short-term volatility. At the same time, sustained dilution raised concerns around long-term equity value capture. Additional issuance weakened investor appetite as balance-sheet risks became increasingly visible. Leverage turns against shareholders Leverage stopped enhancing returns once market conditions shifted against premium-based positioning and elevated…

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Filed under: News - @ January 3, 2026 4:05 am