Strategy Incorporated

The business model of Strategy has transformed from a traditional enterprise software service provider to a dual-track structure of "software + Bitcoin reserves," with Bitcoin becoming the absolute core:

1. Traditional Software Business:

• The company continues to provide business intelligence (BI) software solutions for enterprises, including data analysis platforms, cloud services, and customized tools, with clients covering several Fortune 500 companies. However, the profit contribution from this business has been continuously shrinking—in 2024, the operating gross profit margin dropped to about 15%, and in the first quarter of 2025, it decreased by another 10% year-on-year.

2. Bitcoin Reserve Engine:

• The core strategy is to issue low-cost debt or equity financing, continuously purchase and hold Bitcoin, forming a leveraged cycle of "financing → purchasing coins → appreciation → refinancing." This model transforms the corporate treasury into a Bitcoin accelerator, currently holding 601,550 BTC (accounting for 2.6% of the total circulation), valued at approximately $71 billion (data from July 2025).

The profits of Strategy have deviated from the traditional business reliance on operational logic, shifting to focus on the value growth of Bitcoin:

1. Capital Appreciation Gains: The unrealized profit from Bitcoin holdings is nearly 30 billion dollars (average cost 71,268 dollars, current price approximately 118,000 dollars), making it the largest source of profit.

2. Leveraged Stock Price Premium: By issuing convertible bonds (such as the "42/42" plan: aiming to raise $84 billion) to purchase Bitcoin, the value of holdings is boosted, which in turn drives the stock price soaring (up 175% in the past year). Its stock MSTR often shows a rise of 1.5–2 times that of BTC during bull markets, attracting high-risk preference funds.

3. Traditional Business Supplement: Although software revenue has decreased in proportion, it provides stable cash flow to support debt interest payments, maintaining the sustainability of capital operations.

(1) Global Impact on the Cryptocurrency Market

• Acceleration of Institutionalization Process: Strategy, as the largest publicly listed corporate holder of Bitcoin, provides a "Corporate Bitcoin Treasury" model for over 135 listed companies, promoting Bitcoin as a mainstream asset on balance sheets.
• Reducing market volatility: Large-scale institutional holdings (accounting for 2.6% of circulation) reduce market selling pressure. Combined with tools like ETFs, this could lower Bitcoin's volatility from the current 70% to an expected low by 2030 (when institutional holdings reach 10%).
• Credit endorsement effect: Its continuous increase in holdings reinforces the narrative of Bitcoin as "digital gold," forcing the traditional financial system to reassess the status of crypto assets (such as the U.S. plan to establish a strategic Bitcoin reserve). (2) Reconstruction of Corporate Financial Logic
• Balance Sheet Revolution: Replacing cash reserves with Bitcoin, challenging traditional corporate financial conservatism (such as NVIDIA still primarily using cash), and promoting the "risk asset reserve" paradigm.
• Capital structure innovation: Attracting funds with different risk preferences through layered securities (common stock MSTR, convertible preferred stock STRK, fixed income notes STRF) to achieve a low-cost financing loop.

The layout of Strategy is almost entirely focused on Bitcoin (BTC), with its impact deeply tied to the BTC ecosystem:

1. Direct Price Manipulation Ability:

• A single purchase of cryptocurrency can trigger market fluctuations (for example, in July 2025, spending $470 million to acquire 4,225 BTC, pushing BTC to break $122,000).
• • Holds a dominant share of the total BTC holdings of global listed companies (the second place, MARAHoldings, has only 50,000 coins), forming a chain reaction of "increased holding expectations → market following suit."

2. Indirect ecological empowerment:

• • Stablecoins (such as USDC): The funds for purchasing coins mostly enter the exchange through the US dollar stablecoin channel, indirectly expanding the clearing scale of stablecoins.
• • Ethereum ( ETH ): Although not directly held, its promotion of Bitcoin ETFs and institutional access paves the way for the approval of ETH spot ETFs, indirectly benefiting the ETH ecosystem.