Strategy and the Bitcoin Investment That Changed the World

In the new era of modern finance, no company has made a move as bold and prominent as Strategy (formerly MicroStrategy), which shifted its entire corporate balance sheet to Bitcoin.

As of May 2025, the company holds a staggering 555,450 BTC, accounting for nearly 2.8% of all Bitcoin in existence worldwide—a move that sent shockwaves through both the crypto and traditional financial markets.

The Turning Point

Before the approval of the Spot Bitcoin ETF in the U.S., investors had limited tools and regulatory clarity to invest in Bitcoin directly. The process was filled with restrictions, misunderstandings, and concerns about security.

Strategy became one of the first publicly listed companies to openly announce that it had converted its corporate balance sheet into digital assets—specifically Bitcoin—as a corporate reserve asset. This not only reflected the personal conviction of CEO Michael Saylor, but also signaled to the world that Bitcoin was shifting from a “risky asset” to a corporate-accepted asset class.

Market Impact

Bitcoin Gains Institutional Recognition

Strategy’s large, continuous BTC purchases—publicly announced each time—showed that Bitcoin was no longer just “a toy for speculators,” but was transforming into a legitimate institutional reserve asset.

Circulating Supply Decreases

When one company holds this much BTC, the circulating supply drops, reducing the number of coins available for trading. This decreases market liquidity and increases volatility, especially during high-volume buy/sell periods.

MSTR Becomes a Crypto Proxy

Investors started to view Strategy stock ($MSTR) as a Bitcoin Proxy—a listed asset that mirrors Bitcoin’s price movement. This linked the stock market and the crypto market more closely than ever before.

From an Investor’s Perspective

The sight of a large public company holding so much BTC reinforces the HODL philosophy among retail investors, boosting confidence in long-term Bitcoin holding despite short-term volatility.

Strategy’s move sparked a broader question among corporate treasuries:

“Should we keep our reserves in Bitcoin too?” “Is this visionary leadership or reckless risk-taking?”

Institutions Turn to MSTR Instead of BTC

Before Spot ETFs were approved, many institutions weren’t allowed to hold BTC directly, so they opted to buy MSTR instead, making it a popular Bitcoin Proxy.

Institutional Shareholders in Strategy

Past (2020–2021):

• BlackRock, Inc. – Held approx. 16.3% in 2021
• Capital Group – Early large holder
• Norges Bank – Norway’s sovereign wealth fund, early investor

Present (2025): As of May 2025, institutional investors still play a major role in holding Strategy shares:

• BlackRock, Inc. – Increased holdings to 14.2 million shares (~5.8% of the company, up 49.76% from late 2024)
• Norges Bank – Holds shares worth $524 million (Q4 2024)
• Swiss National Bank – 466,000 shares (mid-2024)
• Vanguard Group Inc. – 16 million shares (~$4.7B as of Dec 2024)
• Citadel Advisors LLC – 24 million shares (~$7.0B)
• Jane Street Group LLC – 23 million shares (~$6.6B)

These holdings signal confidence in Strategy’s Bitcoin-centric approach and provide institutional exposure to crypto via traditional equities.

Praise, Criticism, and Debt

While some applaud Michael Saylor’s vision for recognizing the future of digital assets, others see this as an extremely high-risk strategy—especially since the company’s core software business has seen declining revenue.

Importantly, Strategy didn’t rely solely on its cash reserves. It aggressively raised funds by issuing debt securities, borrowing billions of dollars over the past five years to buy Bitcoin. The company issued convertible notes worth approximately $7.27 billion to accumulate BTC.

Despite repaying some of its debt, Strategy continues to issue new bonds to expand its Bitcoin holdings.

Traditional Investors Can No Longer Ignore Crypto

The correlation between MSTR and BTC prices means traditional market participants are now forced to understand the crypto market. Stock investors must analyze Bitcoin prices alongside earnings reports, recognizing that digital asset volatility directly affects stock prices.

Also, since Strategy holds nearly 3% of all Bitcoin, a significant amount of BTC is locked away from circulation. This impacts market liquidity and can amplify price volatility during periods of high demand or panic.

Final Thoughts: Pioneer or Gamble?

A question that remains unanswered:

Will Strategy be remembered as a pioneer of institutional crypto adoption, or as a cautionary tale of overleveraged risk management?

If Bitcoin continues to soar, Strategy may generate immense shareholder returns and be celebrated as a visionary leader.

But if Bitcoin enters a prolonged bear market and the company fails to sustain income from its core business, its debt burden and unrealized BTC losses could turn into a ticking financial time bomb.