Strategy CEO Phong Le Thinks MSTR Stock Will Outperform Bitcoin During the Next Bull Market. Here's Why He's Wrong.

Strategy (MSTR) has started selling some of its Bitcoin (“Sometimes sell your Bitcoin”), drawing strong pushback from the crypto community and signaling potential recurring liquidity/treasury stress. The article cites large crypto-position losses at other Bitcoin treasury firms—Trump Media’s $190M crypto loss and Twenty One Capital’s $414M Bitcoin loss—suggesting Strategy’s issues may be more than temporary. While it notes potential upside from the Digital Asset Market Clarity Act, the piece argues Strategy is unlikely to outperform Bitcoin over the long run as the “flywheel” may now work in reverse.

Analysis

MSTR is at risk of rerating from a leveraged Bitcoin call option into a quasi-closed-end fund with balance-sheet and funding risk. Once the market believes BTC can be sold to satisfy obligations, the key premium is no longer the asset itself but confidence in forced-sale avoidance; that premium can evaporate quickly, especially if equity issuance becomes less credible and debt markets price in higher dilution risk.

The larger contagion is to other treasury-style holders: if one levered vehicle de-risks, investors will assume the rest are next, which raises the probability of reflexive selling and wider NAV discounts across the complex. That dynamic matters more for the next 1-3 months than the spot BTC price, because it can create an equity-led air pocket even if Bitcoin is only drifting lower.

A second-order beneficiary is the AI infrastructure trade, not crypto incumbents. Miners redirecting capex toward compute lowers future BTC supply growth at the margin while channeling capital into GPUs, networking, and power infrastructure; that is a slow-burn positive for NVDA and selected data-center supply chain names over 6-18 months. The contrarian case is that modest BTC sales may actually improve MSTR survivability by reducing the probability of a disorderly recapitalization; the thesis breaks if BTC stabilizes and MSTR’s NAV discount narrows instead of widening.

Key Decisions for Investors

• Short MSTR on strength or buy near-dated put spreads into any rally; the trade works if the market continues to price MSTR as a levered de-risking story rather than a BTC proxy. Falsifier: MSTR premium-to-NAV re-expands and BTC stabilizes for several weeks.
• Pair trade: long IBIT/spot BTC exposure vs short MSTR for 1-3 months. This isolates the collapse in equity premium and funding optionality while keeping directional crypto exposure neutral.
• Short XXI and any similarly structured crypto-treasury names on bounces; the setup is a contagion trade, not a company-specific one. Cover if they demonstrate they can fund operations without additional asset sales.
• Watch NVDA on pullbacks as an indirect beneficiary of miner AI redeployment; prefer expressing this only if miners continue announcing compute deals, since the catalyst is slower and less certain than the MSTR short.