Strategy’s Bitcoin Gameplan Faces Dark Outlook As Expert Warns Of ‘Spiral Of Doom’

Strategy added 430 Bitcoin on Aug. 17, spending a little over $51 million at an average of roughly $119,666 a coin. The move lifted its total to 629,376 BTC, a holding worth about $46.15 billion at current prices.

The company reports an average buy price of $73,320 per Bitcoin and says its crypto holdings are up 25% so far this year.

Short and clear: the numbers are huge. Longer view: the scale of the bet helps explain why every tweak to policy now matters to both investors and critics.

Equity Guidance And mNAV Rules

According to reports, Strategy will use a measure called mNAV — market net asset value — to decide when to issue stock, buy Bitcoin or take other steps.

If MSTR trades above four times mNAV, the firm will sell new shares aggressively to buy more Bitcoin.

If the stock sits between two-and-a-half and four times mNAV, the company will still issue shares but only when it sees a good opportunity.

Once the multiple falls below two-and-a-half, Strategy says it could sell shares to cover debt interest, pay preferred equity dividends and meet other needs.

Reports add that if shares ever fall under 1x mNAV, the company could borrow money to buy back its stock.

For scale: at 4x mNAV the implied price would be about $1,000, at 2.5x roughly $600 and at 1.0x roughly $210. Today the stock trades near $344, carrying an mNAV of about 1.58x.

potential spiral of doom looming for @MicroStrategy:

– sell $MSTR shares to service debt – dilute shareholders further each time – shares become worth less – interest payments mount – $MSTR sell its bitcoin to pay interest

how do you think this ends? https://t.co/BfMPH4JHfo

— Dom | EasyA (@dom_kwok) August 19, 2025

Experts Warn Of A Downward Spiral

According to Dom Kwok, co-founder of EasyA, the plan risks trapping the company in a “spiral of doom.” He warns that repeated share issuance dilutes existing holders.

That can push the share price down. Lower stock then forces more stock sales to raise cash. Over time, this cycle can accelerate.

It is a simple math problem that becomes painful when markets wobble. Reports suggest this is the core fear among many independent analysts.

Strategy’s balance sheet moves are paired with a core bet: keep adding Bitcoin and hold it. The firm’s 629,376 BTC is the largest corporate reserve anywhere, and that scale gives the company credibility when prices rise.

Yet buying more by issuing stock ties the treasury to the share market. According to the update, the company’s average buy price of $73,320 still leaves room for gains, but the link between stock issuance and Bitcoin buying raises a structural issue.

If earnings, interest costs or investor sentiment shift, the math could flip fast.

Featured image from BestHDWallpaper.com, chart from TradingView