With over $128 billion, Strategy has hit an all-time high (ATH) in market cap. However, this record highlights an insidious phenomenon in its method of financing Bitcoin.
Strategy hits ATH in market cap
On Wednesday evening on X, Michael Saylor, Strategy’s executive chairman and co-founder, shared a dashboard showing that the company had reached an all-time high (ATH) on the stock market. The company now has a market capitalization of $128.52 billion, making it the 84th largest publicly traded company in the United States:
As for the MSTR share price itself, the ATH has not yet been beaten. With a unit price of $455.9, the stock is still trading down 16% from its all-time high of $543 on November 21, 2024:
To understand this phenomenon, whereby Strategy’s market capitalization can be at an all-time high but its share price is not, we need to look at the company’s bitcoin purchasing strategy.
In order to finance its colossal investments, the company uses two levers: issuing debt through bonds and issuing shares. It is the latter that interests us.
By creating phenomenal quantities of shares, Strategy significantly dilutes the positions of existing investors, causing them to automatically lose value. While Michael Saylor extols the virtues of Bitcoin (BTC) in the face of structural inflation of fiat currencies, his company ironically uses a mechanism similar to printing money to meet its needs.
Of course, the company is not alone in operating in this way, and this technique is used by many Bitcoin and Ethereum Treasury Companies. We can therefore expect to see similar phenomena among these players.
To date, Strategy’s 601,550 BTC represent 55.54% of the company’s capitalization. At the same time, BTC is trading at $118,671 at the time of writing, down slightly by 0.4% over 24 hours.
