Bitcoin's growing power poses a challenge to Strategy's significance
In a significant shift for the financial market, Strategy Inc, once a popular choice for investors seeking Bitcoin exposure, has seen its appeal diminish in 2025. This change comes despite Bitcoin reaching record highs, with the digital currency briefly crossing the $124,000 mark.
While Bitcoin's surge, Strategy Inc's shares have struggled to keep pace. During the peak week, the stock fell about 9%, trading significantly below its previous highs. This decrease in the premium between Strategy Inc and Bitcoin can be attributed to a few factors.
Firstly, the amplification and beta effect that Strategy Inc's stock historically had relative to Bitcoin is diminishing. This shift might be due to market dynamics, including the availability of SEC-approved Bitcoin ETFs attracting large inflows, totalling $118 billion. These ETFs provide investors with a more straightforward and cost-efficient way to gain direct exposure to Bitcoin.
Secondly, institutional adoption is driving a more regulated and direct access to Bitcoin. This trend diminishes the relative advantage of holding Strategy Inc stock for Bitcoin exposure.
Despite Strategy Inc holding about 629,000 BTC, worth approximately $72.5 billion, the company's valuation premium relative to its Bitcoin holdings has compressed sharply from 2.5-3x in 2024 to nearly 1.4x in 2025. This indicates that investors now value the company closer to the net asset value of its Bitcoin reserves rather than a leveraged Bitcoin proxy.
Between February and August 2025, Bitcoin gained around 22%, but Strategy's stock rose less than 9%, losing its characteristic amplification effect. Some analysts still see upside for Strategy, with price targets in the $550 to $570 range suggesting more than 50% potential gains from current levels.
The change in market dynamics is also reflected in the performance of other treasury-style plays, such as Metaplanet in Japan, which has dropped more than a third over the same period.
Hedge funds have taken on a larger role in daily trading of Strategy's stock, and retail channels for buying Bitcoin have widened, with platforms like Coinbase, Robinhood, and traditional brokerages allowing users to buy fractions of Bitcoin directly.
In conclusion, the weakening correlation and valuation premium between Strategy Inc and Bitcoin in 2025, amid Bitcoin's record highs, result from a structural market shift where investors prefer direct Bitcoin exposure through ETFs and other vehicles, along with a recognition that Strategy Inc's stock no longer provides a meaningful leverage effect on Bitcoin's price performance.
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