Have you ever watched a stock you believed in just keep sliding lower, no matter how much good news seems to surround it? That’s the uneasy feeling a lot of MicroStrategy holders are experiencing right now. The company that’s become synonymous with corporate Bitcoin adoption is facing a perfect storm, and some analysts are openly warning about a potential plunge toward $100 per share.
It’s not hard to see why the nerves are setting in. The share price has already shed more than 65% from its peak earlier this year, and the downward momentum shows few signs of slowing. What started as an aggressive—but celebrated—strategy of stacking Bitcoin now looks increasingly risky to a growing number of investors.
Why MicroStrategy’s Bold Bitcoin Bet Is Starting to Backfire
At its core, MicroStrategy’s playbook hasn’t really changed. The company continues to raise cash through equity and debt offerings, then turns around and buys as much Bitcoin as it can. Just this past week, it scooped up another 1,229 BTC using proceeds from selling shares. That brings its total holdings to well over 672,000 coins—an eye-watering stash when Bitcoin is trading around $87,000.
In theory, this should be bullish. More Bitcoin means more upside exposure if the cryptocurrency resumes its climb. But markets aren’t always rational in the short term, and right now they’re punishing the stock severely.
Perhaps the most worrying development is the complete disappearance of the premium investors used to pay for MicroStrategy shares. For years, the stock traded at a substantial markup to the value of its Bitcoin treasury. People were essentially paying extra for the convenience of getting Bitcoin exposure through a traditional stock.
The Vanishing Premium: A Game-Changer for Funding
That premium has now evaporated entirely. Recent calculations show the market cap to net asset value (mNAV) ratio dipping below 1.0—meaning the company’s Bitcoin holdings are technically worth more than the entire equity value of the business. When you factor in debt for the enterprise value version, the multiple has even turned negative for the first time ever.
I’ve followed corporate Bitcoin adopters for years, and this shift feels significant. The premium was the fuel that kept the flywheel spinning. Without it, raising fresh capital becomes far more expensive and dilutive. Convertible bond issuances, once a clever way to borrow cheaply, suddenly look less attractive to new investors.
A negative enterprise value multiple on Bitcoin holdings is almost unheard of in this space. It signals that the market no longer trusts the strategy’s sustainability.
And trust is exactly what’s eroding. Every new at-the-market (ATM) share offering chips away at existing holders’ ownership. The outstanding share count has ballooned from under 80 million to around 267 million in a relatively short period. That’s real, tangible dilution—and it’s happening repeatedly.
Dilution on Autopilot: The ATM Machine Keeps Printing
MicroStrategy still has billions left in its current ATM authorization. That means we should expect more share sales, more Bitcoin purchases, and unfortunately, more pressure on the per-share value of the Bitcoin treasury. It’s a feedback loop that works beautifully on the way up but can become vicious on the way down.
Think about it this way: each new share sold reduces the slice of the Bitcoin pie that existing shareholders own. If Bitcoin stays flat or declines, the per-share holdings drop meaningfully. Only a sharp and sustained Bitcoin rally can offset that math—and right now, BTC itself looks wobbly after failing to hold above $90,000.
- Recent purchase: 1,229 BTC funded by $108.8 million in share sales
- Remaining ATM capacity: Approximately $11.6 billion
- Outstanding shares: Up from <80 million to 267 million
- Bitcoin per share: Continuously declining with each offering
It’s easy to cheer the growing Bitcoin stack in absolute terms. But for stock investors, the per-share metrics matter more—and those are heading in the wrong direction.
Bitcoin’s Own Struggles Are Amplifying the Pain
Of course, none of this would feel quite so urgent if Bitcoin were blasting to new highs. A rising tide lifts all boats, and MicroStrategy’s leveraged exposure would shine. Instead, Bitcoin has pulled back to the mid-$80,000s and is forming patterns that technical traders interpret as bearish.
Lower Bitcoin prices directly translate to lower underlying asset value for MicroStrategy. Combine that with ongoing dilution, and you get a double whammy on the stock price. It’s no surprise shares have found little support on the way down.
Some longtime bulls argue this is just temporary noise. They point to the enormous Bitcoin hoard and insist the long-term thesis remains intact. Fair enough—but markets can stay irrational longer than investors can stay solvent, as the saying goes.
Technical Analysis: The Charts Aren’t Kind
Stepping back to the weekly chart paints a pretty grim picture. The stock formed a classic double-top around $457, with the neckline near $234. That level gave way months ago, triggering a cascade lower.
Price has now sliced through both the 50-week and 100-week moving averages. Those lines are on the verge of a death cross—a bearish signal that often precedes further declines. The 61.8% Fibonacci retracement of the entire bull move has also been breached, opening the door to much lower levels.
Oscillators like RSI and MACD remain in downtrends with plenty of room to run lower. Volume patterns show distribution rather than accumulation. In plain English: sellers are in control.
The $100 level isn’t pulled out of thin air. It represents psychological support, a prior consolidation zone, and roughly the next major Fibonacci extension. If momentum stays negative, that target starts looking realistic rather than alarmist.
- Double-top breakdown confirmed
- Moving average death cross forming
- Key Fibonacci levels violated
- Momentum indicators bearish and oversold but not reversing
- Next major support near $100
Technical analysis isn’t foolproof, of course. A sudden Bitcoin surge could invalidate everything overnight. But based on price action alone, the path of least resistance appears downward.
Is There a Bull Case Left?
To be fair, MicroStrategy still has passionate defenders. They argue the company is simply front-running institutional adoption. With spot Bitcoin ETFs now available, why pay a premium for indirect exposure? Yet the counterargument is that most institutions prefer the regulated ETF structure over a highly leveraged software company.
Another potential catalyst would be a shift back to software fundamentals. MicroStrategy was once known for business intelligence tools, not Bitcoin. If management refocuses and the core business improves, that could provide a floor. But recent earnings calls suggest Bitcoin remains priority number one.
Perhaps the most intriguing possibility is a change in strategy. Some speculate that at a deep discount to NAV, the company could pivot to share buybacks instead of more purchases. That would be a dramatic reversal—but stranger things have happened when survival is on the line.
What Should Investors Do Now?
There’s no one-size-fits-all answer. Long-term Bitcoin believers might view current levels as a buying opportunity, betting on eventual appreciation of the holdings. More cautious types will likely wait for signs of stabilization—perhaps a reclaim of key moving averages or a positive NAV premium.
Risk management feels especially important here. The downside scenarios are severe, while upside requires multiple things to go right simultaneously: Bitcoin recovery, halted dilution, and renewed investor enthusiasm.
In my experience watching leveraged crypto plays, patience is often rewarded—but so is discipline. Setting clear stop levels or position sizing appropriately can make the difference between a temporary drawdown and permanent capital loss.
The MicroStrategy story has been one of the most fascinating in markets over the past few years. From sleepy software firm to Bitcoin proxy extraordinaire, it’s captured imaginations and generated enormous wealth for early believers. But every strategy has its season, and right now the weather looks stormy.
Whether $100 becomes reality or proves to be an oversold extreme only time will tell. One thing feels certain: volatility will remain high, and the ride probably isn’t over yet. For better or worse, MicroStrategy continues to offer one of the purest—and riskiest—ways to bet on Bitcoin’s future through traditional markets.
As always, do your own research and consider your risk tolerance carefully. Markets have a way of humbling even the most confident forecasts.
