Strategy Halts Bitcoin Buys as NAV Discount Breaks Treasury Flywheel
Strategy has halted its regular Bitcoin purchases for five weeks because a persistent discount to its net asset value has rendered its signature equity-issuance flywheel unprofitable, shifting the firm's focus to servicing hefty debt and dividend obligations.
Strategy has not purchased Bitcoin for five weeks, marking a sharp reversal for the world’s largest corporate holder of the token. The company’s last reported acquisition was 520 coins for $35 million in mid-June, bought at an average price of $67,068. Since then, Strategy has actually sold portions of its holdings in late May, late June, and early July.
This pause signals the effective collapse of the treasury flywheel Strategy popularized. That model relied on the company’s stock trading at a premium to its net asset value, allowing it to issue cheap equity, buy Bitcoin, and increase its Bitcoin-per-share metric to sustain the premium. Strategy stock now trades at just 0.6 times its NAV, making new equity issuances dilutive to its Bitcoin-per-share ratio. Even when adjusting for enterprise value and capital structure obligations, the multiple only reaches roughly 1 times NAV.
Issuing stock at a discount is not the only factor forcing Strategy’s hand. The company faces $1.76 billion in annual outlays for interest expenses and dividend payments. A significant portion of this burden comes from its "Stretch" perpetual preferred stock, which saw its dividend yield raised to 12% on July 1.
Strategy’s core software operations cannot cover these heavy fixed costs. Trailing revenue for that business stands at just $490 million. Rather than drain reserves to accumulate a volatile digital asset, management is prioritizing liquidity. Strategy currently holds $3.75 billion in cash, enough to cover more than two years of its expected annual obligations. This exceeds the company's stated requirement to hold at least 12 months of cash reserves.
For market participants, the shift underscores the structural fragility of corporate treasury models dependent on sustained stock premiums. As long as Strategy shares trade at a deep discount to their underlying Bitcoin holdings, the firm is effectively locked out of the market. Capital allocation has shifted from aggressive accumulation to strict balance sheet defense.
