Strategy (MSTR) Stock: Bitcoin Bet Pays Off with $20 Billion Unrealized Gains

TLDR

MSTR stock surged 5% on Tuesday thanks to positive U.S. labor data and Bitcoin’s recovery, closing at $387 Strategy announced new preferred stock (STRD) to raise capital for more Bitcoin purchases, adding to their existing financing options The company now holds 580,955 Bitcoin worth $60 billion with $20 billion in unrealized profits at current prices Top investor The Asian Investor upgraded MSTR from Strong Sell to Hold, citing reduced risk due to Bitcoin’s price rise Wall Street analysts maintain a Strong Buy rating with average price target of $524.92, implying 39% upside potential

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Strategy’s stock climbed 5% on Tuesday as the company unveiled fresh financing plans while Bitcoin rebounded from recent lows. The move comes as investors weigh the risks and rewards of the company’s crypto-heavy strategy.

Strategy Incorporated (MSTR)

The Tuesday rally pushed MSTR shares to $387, driven by positive U.S. labor market data that boosted broader market sentiment. The tech-heavy Nasdaq gained 0.81% while the S&P 500 added 0.58% for the session.

Strategy’s gains outpaced the broader market thanks to the company’s announcement of a new preferred stock offering called Stride (STRD). This latest financing tool gives the company another way to raise capital for Bitcoin purchases.

According to analyst Dylan LeClair, the STRD offering provides fewer investor protections than previous preferred stock issues. The dividends are non-cumulative and non-mandatory, making them junior to existing preferred shares.

$STRD is $STRF without all of the protections in place; non-cumulative, non-mandatory dividends, junior to $STRF. $STRF = Investment Grade $STRD = Junk Grade

Saylor is coming for the entire fixed income market. https://t.co/c2ssoqf3oa

— Dylan LeClair (@DylanLeClair_) June 2, 2025

Analyst Jeff Walton called the move “history in the making” as Strategy expands its financing options. The company now has three different stock classes – STRD, STRF, and regular MSTR shares – creating what he described as a “massive capital capacity war chest.”

Growing Bitcoin Holdings Drive Performance

Strategy’s Bitcoin strategy continues to pay off in raw numbers. The company now holds 580,955 Bitcoin worth approximately $60 billion at current prices.

The total acquisition cost for these holdings was $40 billion. This means Strategy is sitting on $20 billion in unrealized profits from its Bitcoin investments.

In the first five months of 2025 alone, the company purchased 133,485 Bitcoin. Strategy now controls nearly 3% of Bitcoin’s total circulating supply.

The company plans to continue debt-financed Bitcoin acquisitions throughout 2025 and beyond. Recent purchases have been funded through at-the-market share offerings and preferred stock issuances.

MSTR stock has outperformed Bitcoin itself in recent months. In Q2, MSTR gained 28% compared to Bitcoin’s 22% return.

Analyst Sentiment Shifts on Reduced Risk

The Asian Investor, a top-ranked analyst on TipRanks, recently upgraded MSTR from Strong Sell to Hold. The change reflects Bitcoin’s recovery to new all-time highs.

Source: Tipranks

“With Bitcoin interest set to only increase going forward due to institutional adoption, I believe Bitcoin’s price surge limits the risks of an investment in Strategy,” the analyst said.

The upgrade marks a shift from previous concerns about MSTR’s high valuation relative to Bitcoin’s price. Bitcoin’s recent strength has made the stock’s premium appear more reasonable.

Currently, investors pay about 3.1 times Strategy’s GAAP book value of $121 per share. While this represents a premium, it’s lower than historical peaks during crypto market rallies.

The Asian Investor remains cautious despite the upgrade. The analyst noted Strategy’s “relatively irrelevant underlying intelligence business” and the risks of leveraged Bitcoin exposure.

Strategy faces potential mark-to-market losses if Bitcoin drops sharply. This leveraged approach creates vulnerability during crypto market downturns.

Wall Street analysts are more optimistic about MSTR’s prospects. The stock carries a Strong Buy consensus rating based on 12 Buy recommendations and just one Sell.

The average analyst price target sits at $524.92, implying 39% upside from current levels. This suggests confidence in Strategy’s Bitcoin strategy despite short-term volatility risks.

QCP Capital warned that Q3 could bring turbulence for Bitcoin due to tariff discussions and debt ceiling debates. Such macro headwinds could pressure MSTR given its close correlation with cryptocurrency prices.

At press time, MSTR traded at $376, down 3% from Tuesday’s close as Bitcoin briefly dipped below $105,000.

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