Strategy Stock vs Bitcoin: Why Direct Investment May Be the Better Bet

Strategy (MSTR) and Bitcoin (BTC) have both struggled this year, with year-to-date losses of 38% and 29%, respectively.

However, investors may be better off buying into the cryptocurrency itself rather than Strategy stock, which serves as a leveraged bet on Bitcoin's performance.

The company's business model relies heavily on dilution, issuing debt to accumulate more Bitcoins, but this strategy only works when the market is bullish.

When the price of BTC drops faster than Strategy's, the yield from equity and dilution decreases, making it less profitable for investors. In fact, Strategy's Bitcoin yield has dropped from 9.4% in Q1 to 4.5% due to this effect.