MicroStrategy's Ambitions and Predicaments: The Survival Game of a Whale Holding 6.7 Million Bitcoins

As the end of 2025 approaches, the former business intelligence software company MicroStrategy has undergone a complete transformation. 670,000 Bitcoin—accounting for 3.2% of the global Bitcoin supply—this is not just a number but the ultimate proof of the company’s strategic shift. Renamed Strategy Inc., it has evolved from a traditional tech enterprise into a “structured Bitcoin financial platform.” However, in the increasingly volatile market and a Q4 2025 where regulatory rules may be rewritten, the so-called “epoch-making financial innovation” by founder Michael Saylor is facing its most severe test since its launch in 2020.

From Software Company to Bitcoin Financial Institution: The Logic of Ambition

MicroStrategy’s transformation may seem complex, but it is essentially a relatively simple financial game. The core logic is to leverage the market’s premium on its stock relative to its net asset value in Bitcoin, continuously raising funds to buy more Bitcoin, resulting in a sustained increase in the number of Bitcoins per share.

This mechanism relies on only one premise: MSTR’s stock price must remain consistently above its actual value in Bitcoin. When this premium exists, the company can raise funds through stock issuance to buy more Bitcoin, and the number of Bitcoins per existing share will actually increase—this is called a “positive feedback engine.” Stock price rises → new shares issued for financing → BTC purchased → assets grow → further driving up the stock price, creating a self-reinforcing closed loop.

But this engine has a fatal trigger: the premium must always exist. Once the premium disappears or turns into a discount, the entire financing model collapses instantly.

Where does the money come from? An overview of the three-layer financing matrix

To understand how MicroStrategy continues to burn money buying Bitcoin, one must delve into its 8-K filings submitted to the U.S. Securities and Exchange Commission(SEC). The company’s financing model has evolved from initial convertible bonds into a multi-dimensional capital matrix.

First Layer: ATM Program—The Money Printing Machine for Premiums

The primary source of financing is its At-the-Market (ATM) offering plan(At-the-Market, ATM). The principle is straightforward: when MSTR’s stock price exceeds the net value of Bitcoin, the company sells new shares on the open market to raise funds for Bitcoin purchases.

Between December 8 and 14, 2025, MicroStrategy sold over 4.7 million shares of MSTR, raising approximately $882 million in net proceeds. The attractiveness of this financing method lies in—so long as the premium exists, the issuance is not dilutive to existing shareholders but rather “enhances” their position.

Second Layer: Perpetual Preferred Stock Matrix—Risk Tiering

In 2025, MicroStrategy launched a series of perpetual preferred stocks to attract investors with different risk appetites. In just one week in December, these preferred stocks raised $82.2 million(from). These preferred stocks are typically structured as “capital return” dividends, offering tax advantages to investors—allowing them to defer tax obligations for at least ten years.

Third Layer: “42/42 Plan”—An $8.4 Billion High-Stakes Gamble

MicroStrategy is executing its most ambitious financing blueprint. From 2025 to 2027, it plans to raise $4.2 billion through equity financing and another $4.2 billion via debt, totaling $8.4 billion, all invested in Bitcoin purchases. This is an upgrade of the previous “21/21 Plan,” reflecting management’s high confidence in capital markets’ acceptance of its securities.

This move effectively turns MicroStrategy into a leveraged Bitcoin closed-end fund, but with the flexibility of a listed company, enabling it to access financing options unavailable to traditional funds.

Ending the Rumors of “Bitcoin Selling”

Recently, rumors circulated that MicroStrategy planned to sell Bitcoin, but on-chain data and financial statements directly dispelled these rumors.

In mid-November and early December 2025, blockchain monitoring tools such as ArkhamIntelligence( detected large-scale asset movements from wallets controlled by MicroStrategy—about 43,415 Bitcoins) worth approximately $4.26 billion( transferred from known addresses to over 100 new addresses. The market was shaken, and Bitcoin briefly fell below $95,000.

However, subsequent professional audits and company management clarified: this was not a sale but “routine custody and wallet rotation.” To reduce credit risk associated with a single custodian)such as Coinbase custody(, MicroStrategy dispersed assets across more secure addresses. According to Arkham’s analysis, such operations are usually driven by security needs rather than asset liquidation.

MicroStrategy CEO Michael Saylor repeatedly publicly denied these rumors in tweets and CNBC interviews, stating: “We are buying, and buying heavily.” In fact, in the second week of December, the company purchased 10,645 BTC at an average price of $92,098 per coin, directly responding to the sale rumors with the strongest rebuttal.

More importantly, the company’s recently established $144 million USD Reserve)further confirms—there is no need to sell Bitcoin to pay dividends or debt interest, as this reserve can cover at least 21 months of expenses.

Overlooked Software Business

Despite Bitcoin operations dominating all headlines, MicroStrategy’s software business remains the key foundation for maintaining its listed status and covering daily operational costs.

In Q3 2025, total software revenue reached $128.7 million, a 10.9% YoY increase, exceeding market expectations. Subscription revenue surged significantly, but due to ongoing investments in AI development and cloud infrastructure, this business did not generate positive operating cash flow in the first half of 2025. In Q3, free cash flow was negative $45.61 million, indicating ongoing operational losses, with all Bitcoin accumulation relying on external financing.

Starting January 1, 2025, MicroStrategy adopted the ASU 2023-08 accounting standard, requiring revaluation of Bitcoin at fair value and recording changes in current net income. This caused the company’s profitability to fluctuate wildly on paper.

In Q3, benefiting from rising Bitcoin prices, the company recorded an unrealized gain of $3.9 billion, resulting in a quarterly net profit of $2.8 billion. Currently, BTC prices fluctuate around $93,130, with a market share of 54.65%.

Three Swords Hanging Overhead

Although complex financial engineering reduces the short-term risk of forced liquidation, MicroStrategy still faces several systemic risks that could shake its foundation.

First Sword: MSCI Index Removal Risk

The most immediate threat comes from MSCI’s review. MSCI proposes reclassifying companies with more than 50% of assets in digital assets as “investment tools” rather than “operating companies.”

Since Bitcoin constitutes the majority of MicroStrategy’s assets, if this rule is adopted, the company will be excluded from the MSCI Global Investable Market Index(GIMI). This would force passive funds to sell between $2.8 billion and $8.8 billion worth of stock. Such forced selling pressure would directly depress the stock price, eroding the premium relative to net asset value. Once the premium disappears or turns into a discount, the “positive feedback engine” of Bitcoin purchases will be completely shut down.

Second Sword: Contraction of Net Asset Premium and Financing Disruption

MicroStrategy’s entire asset accumulation logic is built on the market’s willingness to pay a premium over its net asset value. By the end of 2025, this premium becomes highly unstable.

In early December, concerned about being delisted, MSTR traded at an 11% discount relative to its Bitcoin holdings’ value. When the stock trades at a discount, any new equity financing dilutes existing shareholders’ Bitcoin per share. This could force the company to halt asset accumulation or even raise doubts among creditors about asset integrity.

In September 2025, MicroStrategy temporarily suspended its ATM plan—demonstrating the management’s high sensitivity to valuation multiples.

Third Sword: Debt Pressure and Theoretical Liquidation Price

By the end of Q3 2025, MicroStrategy’s total debt was approximately $8.24 billion, with annual interest payments around $36.8 million and preferred stock dividends about $638.7 million.

Although its convertible bonds are not collateralized by Bitcoin, reducing the risk of immediate “liquidation” during market crashes, a sharp decline in Bitcoin prices would severely test the company’s debt repayment capacity.

Conclusion: High-Stakes Gamble Amid Uncertainty

The situation of MicroStrategy at the end of 2025 vividly reflects the opportunities and dilemmas faced by companies attempting to break through traditional financial boundaries. Its continued accumulation of Bitcoin remains unchanged, and the $144 million reserve further provides a buffer against potential liquidity crises.

But MicroStrategy’s greatest risk does not lie in Bitcoin price volatility but in its ties to the traditional financial system—namely, index status and net asset premium. If institutions like MSCI ultimately decide to exclude it from the traditional stock universe, MicroStrategy will be forced to prove to investors that, as a “structured financial platform backed by Bitcoin,” it can sustain growth even without passive index inflows.

Whether the “42/42 Plan” can be realized on schedule depends on whether the company can continuously create attractive products for institutional investors during its Bitcoin financing process, while maintaining basic financial dignity amid the painful cloud transition of its software business.

This is not only an enterprise experiment but also a microcosm of the entire crypto industry’s integration with traditional finance. In this unprecedented game, the only certainty is: no one knows how this story will end.