As more attention lands on Bitcoin treasury firms, Strategy’s business model is once again in the spotlight.
A recent analysis says Strategy’s core software business is now worth almost nothing compared to the company’s total market value. Its software business brought in mere $124.3 million in revenue in Q1 2026, while the company holds $53 billion worth of Bitcoin.
Basically, the firm’s valuation has become largely tied to its Bitcoin treasury strategy, which raises concerns about how it would hold up if crypto goes into another prolonged downturn.
How Strategy Got Here
Since 2020, Strategy has evolved from a business intelligence software company into what many investors now regard as a Bitcoin holding company.
It has accumulated more than 845,000 $BTC, the most of any public company. To pay for all that, Strategy kept selling stock and convertible bonds, basically tapping capital markets to grow its Bitcoin stack.
This approach paid off big during Bitcoin rallies, as when $BTC went up, Strategy’s market cap exploded, allowing the company to raise additional funds and purchase even more Bitcoin.
However, some have pointed out that if Bitcoin stays weak for a long time, where will the cash come from?
Strategy still has a software side, but it’s a tiny piece of the company’s value and financial profile. Many investors now buy MSTR (stock ticker for Strategy) primarily for Bitcoin exposure rather than for its enterprise software products.
This means that Strategy’s ability to raise money and keep buying Bitcoin hinges mostly on the market sentiment toward $BTC.
Nonetheless, not everyone thinks this is a problem, and the company itself recently increased its cash reserves to approximately $1 billion.
A Potential Effect on Bitcoin
As it stands now, MSTR is more like a leveraged bet on Bitcoin’s price, magnified by debt and dividends. When the cryptocurrency goes up, the stock can fly even higher, and when $BTC drops, it can fall faster, too.
According to Zacks, an investment research firm, the real issue is structural, as Strategy has no real business to lean on. Everything depends on two things going right at the same time: Bitcoin’s price and investors’ willingness to keep funding the company at a premium.
As such, if either issue continues for too long, we might see more Bitcoin being sold off. Even small sales, like the one we saw in May, could start happening more often.
Related: Strategy’s Bitcoin Transfer Fuels Fresh Bitcoin Sale Speculation
