• Strategy's stock fell 7.4% to its lowest level since October 2024, extending a dramatic 60% decline from its July peak.
  • The company has revised its Bitcoin price and financial targets downward, now expecting the cryptocurrency to trade between $85,000 and $110,000 by year-end.
  • CEO Phong Le's recent acknowledgment of potential Bitcoin sales under crisis conditions has heightened liquidity concerns, with the company's mNAV hovering near a critical 0.95.

Shares of Strategy, the world's largest corporate holder of Bitcoin, tumbled 7.4% on Tuesday, hitting a level not seen since October of last year. The drop deepens a punishing sell-off that has erased tens of billions in market value, driven by a combination of weakening Bitcoin prices and growing anxiety over the company's financial safeguards.

In a significant shift from founder Michael Saylor's long-standing "never sell" doctrine, CEO Phong Le recently confirmed the company has built-in triggers that could force a Bitcoin liquidation. According to people familiar with the matter, a sale would only occur under two simultaneous conditions: if the stock fell below 1x mNAV—meaning the market values the company at less than the Bitcoin it owns—and if Strategy were unable to raise capital through equity or debt. With the stock's mNAV currently around 0.95, dangerously close to the perceived 0.9 danger zone, the market is pricing in heightened risk.

"The disclosure changes the calculus," said one trader who asked not to be named. "It's no longer just a pure Bitcoin proxy; it's a company with obligations that could force its hand in a downturn." Those obligations include annual preferred dividend payments of $750 to $800 million. To shore up its balance sheet, Strategy recently established a $1.44 billion cash reserve funded through common stock sales, a move designed to cushion against volatility and support those dividends.

The pressure is compounded by a stark revision in the company's outlook. Strategy has slashed its fiscal year 2025 profit and Bitcoin yield targets. The company now expects Bitcoin to trade between $85,000 and $110,000 by December 31, 2025, a substantial retreat from its previous projection of $150,000. Based on this new assumption, net income for the year could swing from a loss of $5.5 billion to a gain of $6.3 billion, a range that underscores the extreme volatility tied to its 650,000-Bitcoin treasury.

Technical indicators paint a bleak picture. The stock has broken below critical moving averages, and its Relative Strength Index sits at an oversold level of 28. Some chart analysts suggest the stock may attempt a rebound to retest the $230 level in December, but such a move could confirm a bearish break-and-retest pattern, potentially leading to a deeper fall toward $126.

The broader crypto market entered December on weak footing, with profit-taking affecting major assets. Strategy's recent disclosures have added a structural risk element to the sector's sentiment, as institutional investors view the company's massive position as a barometer of institutional conviction. A forced sale from such a large holder could trigger a cascade of selling pressure. Efforts to reach Strategy for further comment on Tuesday's trading were not immediately successful.

Correction: An earlier version of this article misstated the company's previous Bitcoin price projection. It was $150,000, not $160,000.