Microstrategy's Bitcoin Buying Freeze Continues as Saylor Teases Another Color

Microstrategy has gone four consecutive weeks without buying a single satoshi of Bitcoin (BTC), its longest buying freeze in two years. The company's CEO, Michael Saylor, has been posting accumulation charts on X with the caption 'We're gonna need another color.'

The reason behind the freeze is more complex than just a simple pause in purchases. Microstrategy's entire capital model depends on its stock trading at a premium to the Bitcoin it holds. When the market value of equity (mNAV) divided by the net asset value of Bitcoin holdings sits above 1.0, Strategy can issue new shares at a premium, use the proceeds to buy more BTC, and thereby increase Bitcoin per share.

However, in late June, the mNAV ratio touched approximately 0.99, its lowest point in company history. It has since recovered to roughly 1.03, but management's stated breakeven for the flywheel to generate value for common shareholders sits near 1.22. At 1.03, buying Bitcoin with freshly issued equity is marginally dilutive rather than accretive.

The company has also sold 3,588 BTC for approximately $216 million between June 29 and July 5, the largest single Bitcoin disposal in Microstrategy's history. The proceeds were routed toward preferred dividends and the cash reserve.