Strategy Inc. Transforms into Global Bitcoin Treasury Giant
Strategy Inc., the enterprise software and data analytics business, has undergone a significant transformation. It has become the world's leading Bitcoin treasury company, holding $64.5 billion worth of the cryptocurrency, which is about 92% of its total enterprise value.
The company's stock price has climbed 53% over the past month, riding on the back of Bitcoin's 25% increase. However, Strategy shares remain extremely volatile and are trading 58% below their all-time record.
The bull case for Strategy argues that the company's share price will grow faster than Bitcoin in the long term. This is because Strategy engages in various capital-markets activities to take advantage of fiat currency devaluation by raising capital, which it then uses to buy more Bitcoin.
However, the bear case points out that Strategy's financial engineering model is complex and may not be sustainable. If Bitcoin's price falls dramatically and stays down for an extended period, Strategy shares will likely come under pressure, making it difficult for the company to raise equity capital at reasonable terms.