MSTR Falls Short of IBIT as Premium Disappears in Crypto Market

Strategy Inc.'s stock (MSTR) has fallen by a significant margin compared to the iShares Bitcoin Trust ETF (IBIT), a no-frills spot Bitcoin product, in 2026. According to recent data, MSTR's price dropped approximately 39% year-to-date, while IBIT fell around 27%. There are three key factors that contribute to this gap.

The first reason is the disappearance of the premium. For most of Strategy's Bitcoin-accumulation era, its stock traded at a substantial premium to its net asset value (mNAV), which reached as high as 3.89x in late 2024. This premium reflected investors' expectations for rising Bitcoin prices and the company's accumulation narrative. However, when Bitcoin declined, so did confidence in Strategy's structure, causing mNAV to compress towards 1.0x.

The second reason is dilution. Strategy has continuously sold new shares through its at-the-market (ATM) equity program, resulting in a nearly doubled outstanding share count from approximately 192.5 million at the end of 2024 to 333.9 million by early 2026. This dilution reduces existing holders' percentage ownership of the same Bitcoin position, decreasing per-share Bitcoin value even when headline BTC holdings remain steady.

The third reason is the reversal of Strategy's flywheel mechanics. The company's model was built on a self-reinforcing loop: issue equity at a high mNAV premium, buy Bitcoin, watch Bitcoin appreciate, use rising stock prices to issue more equity at favorable terms, and buy more Bitcoin. However, when mNAV approaches 1.0x, issuing new shares to buy Bitcoin becomes dilutive rather than accretive.