Strategy's evolving bitcoin treasury approach explained

During the week of August 17 to 23, 2026, Strategy sold 18,261,118 of its own class A shares into the market and raised roughly $2.01 billion in net proceeds. It bought no bitcoin with any of it. Some repurchased the company’s own preferred stock, $300 million went into a dividend-and-interest reserve, and the rest into a newly created dollar pool. Four years after Michael Saylor turned a mid-cap software firm into the largest corporate holder of bitcoin, the most instructive thing about the original is what it now does with the money.

The machine: issue paper, buy bitcoin

The treasury playbook has never depended on operating profit. It depends on a public company’s ability to sell securities that shareholders and creditors value at more than the bitcoin those securities will buy. Strategy uses three instruments. Convertible senior notes came first: unsecured debt with very low or zero coupons, bought by investors who accept almost no yield because the note converts into equity if the share price climbs past a set level. As of March 31, 2026, the company reported about $8.20 billion of long-term debt across six series of convertible notes maturing between 2028 and 2032, with coupons from zero to 2.25 percent.

The second instrument is the at-the-market equity program, which drips shares into the open market on any given day rather than announcing a discrete offering. The third is perpetual preferred stock, which never matures but carries a permanent dividend. Strategy has four listed series: Strike at 8 percent, Stride and Strife at 10 percent, and Stretch at a variable rate designed to hold the share near its stated value. As of August 23, 2026, the company held 840,447 bitcoin acquired for an aggregate $63.36 billion, an average of $75,385 per coin.

Why the shares can be worth more than the coins

The metric that governs whether any of this creates value is mNAV, the ratio of a company’s enterprise value to the market value of the crypto on its balance sheet. Above 1.0 the market pays a premium for the wrapper; below 1.0 it applies a discount.

That premium is the engine, not decoration. When a company trades at twice the value of its bitcoin, every dollar of stock it sells buys a dollar of bitcoin while diluting existing holders by only fifty cents of claim on the pile. Bitcoin-per-share rises even as the share count rises, which is why treasury executives call issuance accretive rather than dilutive, and rising bitcoin-per-share in turn supports the premium that makes the next issuance accretive.

Run the arithmetic backwards and the mechanism reverses. Below 1.0, selling stock to buy bitcoin reduces bitcoin-per-share, and the flywheel becomes a slow leak. Third-party trackers put Strategy’s enterprise-value mNAV at roughly 0.99 in August 2026, a market capitalisation near $46.3 billion against bitcoin worth about $65.6 billion. The premium that defined the trade has, for now, gone.

What 2026 did to the copycats

Strategy is the healthy case. Data compiled from BitcoinTreasuries.net and reported in January 2026 found roughly 40 percent of the hundred largest bitcoin treasury companies valued below the net asset value of their holdings, at least 37 at outright discounts. The sector also spent the winter bracing for an index shock: MSCI had consulted on excluding companies whose digital assets exceed half of total assets from its Global Investable Market Indexes, a change analysts estimated could force $10 billion to $15 billion of selling. On January 6, 2026, MSCI declined and deferred the question to a broader consultation; Strategy’s shares rose about 6 percent after hours.

The reprieve did not fix the underlying problem: a discount closes the capital tap, and a company that cannot issue equity accretively and cannot service its obligations from operations has one remaining liquid asset.

Leverage, dividends, and the forced-selling question

Here the structure of the liabilities matters more than their size. A convertible note that never converts because the share price collapsed becomes ordinary debt, repayable in cash on a fixed date. Preferred dividends are perpetual: an 8 or 10 percent annual cash cost that continues regardless of what bitcoin does.

The 2026 record shows how that resolves. MARA Holdings sold 15,133 bitcoin between March 4 and 25 for approximately $1.1 billion, using the proceeds to repurchase about $1.0 billion of its zero-coupon 2030 and 2031 convertible notes at roughly a 9 percent discount, cutting convertible debt by about 30 percent. Riot Platforms sold 5,363 bitcoin during 2025 and pledged 3,300 more as collateral against a $200 million credit facility. Smaller holders unwound entirely, including Genius Group, which sold its last 84 coins to repay $8.5 million of debt. None of these were margin calls in the retail sense; they were companies concluding that the balance-sheet reserve was the cheapest place to find cash.

Strategy’s own response has been to build a buffer rather than accumulate. Its dollar reserve for preferred dividends and interest stood at $5.10 billion on August 23, 2026, alongside $1.59 billion in a more flexible pool created that same week so management could respond to market dislocations.

The Canadian version

The domestic imitator makes the leverage unusually explicit. Matador Technologies, listed on the TSX Venture Exchange as MATA, runs a US$100 million secured convertible note facility alongside a C$30 million at-the-market program, and has publicly targeted 6,000 bitcoin by 2027. On August 17, 2026, it announced an amendment expanding that ATM capacity and committing an amount equal to 10 percent of the net proceeds of every share sale to bitcoin purchases, with the coins deposited as additional bitcoin collateral. The clause states plainly what is implicit in every version of this structure: the bitcoin secures the debt.

Why the model spread beyond Strategy

Strategy’s example was attractive to other public companies for a reason that has nothing to do with bitcoin conviction specifically: a company sitting at a persistent mNAV premium effectively gets to issue equity at a markup, over and over, without the operational risk of building a new product line or entering a new market. For a small-cap or micro-cap firm with a depressed or stagnant core business, converting the balance sheet into a bitcoin accumulation vehicle offered a way to attract a new investor base, largely made up of people who wanted leveraged bitcoin exposure through a brokerage account rather than a crypto wallet, without changing what the underlying company actually did. That is a large part of why the copycat wave included firms with little connection to bitcoin or even to technology, spanning industries from hospitality to biotech, once the pattern became visible in the market.

The problem with that logic is that it depends entirely on the premium persisting, and a premium is a market sentiment variable, not a structural feature of the business. Once a company’s mNAV falls to parity or below, the same mechanism that created value on the way up starts destroying it on the way down, and there is no operating business generating cash flow to fall back on in the interim, only the bitcoin itself and whatever debt was raised to buy it.

What it means for an investor

A bitcoin treasury stock is not a bitcoin tracker. It is a leveraged bet on a capital structure, in which the shareholder sits behind convertible noteholders and several layers of preferred stock and the return depends as much on continued access to cheap financing as on the coin price.

Three questions separate the cases. Where does the stock trade relative to the bitcoin it owns, since a persistent discount means new issuance destroys value. When do the debts mature and what do the preferred dividends cost each year, because those dates are the forcing mechanism. And are the coins pledged as collateral, which decides whether they are a reserve or a margin deposit.

Canadian investors have an alternative that removes the wrapper question entirely. Canada listed the world’s first physically settled spot bitcoin ETF in February 2021, and TSX-listed products such as the Purpose Bitcoin ETF hold bitcoin directly, trade close to the value of their holdings, and are eligible for TFSA and RRSP accounts. Owning a treasury company is a decision to own something else: the financing strategy built on top of the asset.