Just a couple of months ago, critics were comparing Strategy’s bitcoin treasury model to the doomed Terra ecosystem and arguing that its financial engineering was headed for a similar collapse. Now, the picture looks considerably different. Bitcoin has rebounded sharply from its summer lows, and Strategy’s MSTR shares gained roughly 30% in August, outpacing bitcoin’s roughly 24% monthly rise.

The more interesting question is whether the turnaround actually invalidates the criticism, or simply demonstrates how the Strategy machine works when bitcoin starts moving in the right direction again.

Strategy’s basic idea is relatively straightforward, even if the capital structure surrounding it has become anything but simple. The company raises dollars by issuing common stock, convertible debt, and preferred securities, then uses that capital to buy bitcoin. When MSTR trades at a sufficiently large premium to the value of its bitcoin holdings, selling new shares can theoretically increase the amount of bitcoin attributable to each existing share.

The general premise also rests on the belief that bitcoin could eventually become a global reserve asset. If that happens, Strategy wants to own as much of it as possible, as quickly as possible, while using Wall Street’s appetite for securities tied to bitcoin to finance the accumulation.

Over the past year, much of the attention shifted toward Strategy’s STRC preferred stock, which was introduced in July 2025 and became a major part of the company’s so-called Digital Credit strategy. STRC was designed to trade around a $100 stated value, with its dividend rate adjusted to help keep the shares near that level.

It was this very mechanism that ran into trouble in June. STRC plunged to $71.25 on June 26. At that price, raising new capital through STRC would have become substantially more expensive for Strategy because investors would likely demand a much higher effective yield on the preferred stock. In other words, it was becoming much more expensive for Strategy to fund its leveraged bitcoin play. However, as of Monday’s close, it had recovered to $97.10, considerably closer to its intended range.

Despite Bitcoin's 2.5% rise, $MSTR is down 2.5%, increasing the discount. That means if MSTR sells more discounted shares to buy Bitcoin, the loss to shareholders will be even greater. Maybe shareholders are finally wising up and selling rather than waiting to be sacrificed.

— Peter Schiff (@PeterSchiff) June 22, 2026

In June, critics were quick to draw comparisons with Terra, whose UST stablecoin collapsed in May 2022 after losing its dollar peg and triggering a death spiral in the associated LUNA token. Noted gold bug and longtime bitcoin critic Peter Schiff, commenting on Strategy in June, wrote, “Maybe shareholders are finally wising up and selling rather than waiting to be sacrificed.”

A New Strategy

Strategy responded by changing the machine rather than abandoning it. On June 29, the company unveiled a new Digital Credit Capital Framework. It established a dedicated dollar reserve for preferred dividends and debt interest, increased the STRC dividend rate, authorized up to $1 billion in purchases of its own preferred securities, authorized a separate $1 billion MSTR buyback program, and gave the company permission to sell as much as $1.25 billion worth of bitcoin for liquidity and capital-management purposes

At this point, Strategy was no longer treating bitcoin accumulation as the only thing that mattered. It was managing a capital structure with multiple classes of investors who all had different claims on the same pool of assets.

As of Aug. 30, Strategy held 845,050 bitcoin, acquired for a total of $63.73 billion at an average price of $75,412 per bitcoin, which means the company is currently looking at a slight unrealized profit as bitcoin trades around $77,000. It also had $5.10 billion in its USD Reserve, which is primarily earmarked for preferred-stock dividends and debt interest, plus another $1.61 billion in USD Cash for broader treasury purposes. The company has repurchased $636.2 million of STRC since launching its preferred-stock buyback program. On Monday, Strategy also reported purchasing 4,603 bitcoin between Aug. 24 and Aug. 30 for approximately $369.7 million, paying an average of $80,318 per bitcoin.

The company also sold 32 bitcoin for roughly $2.5 million in June. The sale was tiny relative to Strategy’s overall holdings, but symbolically enormous because Michael Saylor had spent years presenting the company as a perpetual buyer. Saylor described the move as a way to “inoculate the market” against the idea that Strategy could never sell bitcoin.

Strategy subsequently sold thousands more bitcoin as it built its USD reserves. By Aug. 10, it had sold roughly 6,900 bitcoin during the summer.

Imagine a bank powered by Bitcoin. pic.twitter.com/svrtfbuX2y

— Michael Saylor (@saylor) November 25, 2025

Strategy increasingly looks less like an investment vehicle that happens to have bought bitcoin on margin and more like a highly specialized financial institution built around bitcoin. Its own August investor materials describe it as seeking to become a “major financial institution and capital-markets platform for the digital asset economy,” while explicitly noting that it is not a bank and does not take deposits.

Forbes made the same distinction more bluntly last year, arguing that “Strategy is not just another vehicle for holding bitcoin” and that its long-term opportunity is to become “the nation’s first bitcoin bank.”