PANews, June 21 – CryptoQuant analyst Axel Adler published an analysis of the current risks facing Strategy (MSTR), noting that MSTR is essentially a high-risk stock offering leveraged Bitcoin exposure, accompanied by complex debt, preferred stock structures, potential dilution, and STRC pressure.

Axel Adler stated that MSTR is not a Bitcoin ETF. Although Strategy describes MSTR as “amplified Bitcoin exposure,” the company explicitly notes that holding MSTR shares is not equivalent to holding BTC, there is no BTC redemption right, and there is no creation/redemption mechanism like that of a spot ETF to keep the share price in sync with net asset value (NAV).

Currently, Strategy’s model involves issuing common stock, preferred stock, and debt financing, then using the funds to purchase BTC. When financing costs are low and the stock price is above asset value, this model can form a “BTC flywheel”; but when BTC declines, MSTR weakens, and preferred shares fall below par value, new financing may shift from enhancing shareholder value to diluting existing shareholders’ equity.

Axel Adler pointed out that the main pressures facing Strategy include:

1. BTC falling below the average cost line: The current BTC price is below Strategy’s average purchase cost of $75,656, shifting market focus from asset appreciation to unrealized loss pressure.

2. Declining STRC financing capacity: STRC once fell below $83, closing around $88.59. Since STRC is an important tool for Strategy’s low-cost financing, if it remains below par value for an extended period, it will raise the company’s future financing costs.

3. BTC sale breaks the long-term narrative: Strategy previously emphasized “only buying, never selling,” but on June 1, the company sold 32 BTC, obtaining approximately $2.5 million to pay preferred stock-related fees. Although the scale is extremely small relative to 846,000 BTC, the market views its symbolic significance as greater than its actual impact.

4. Stock issuance brings dilution pressure: Between June 8 and 14, Strategy sold 1,732,553 MSTR shares, raising approximately $209 million, while purchasing 1,587 BTC. The company’s remaining share issuance capacity is approximately $25.75 billion, meaning future financing through additional share offerings remains possible.

Axel Adler stated that a positive scenario for Strategy still exists: if BTC recovers above the average cost and the market again allows the company to issue shares and preferred stock at low cost, MSTR could once again become a “BTC flywheel”—issuing securities to purchase BTC, increasing BTC value per share, and restoring market confidence.

In summary, MSTR’s current impact on the BTC market is negative to neutral, but not a systemic risk. If BTC recovers to the $75,000–$80,000 range and STRC returns near par value, Strategy’s financing model may recover; otherwise, MSTR will become an additional source of risk that amplifies BTC volatility.

20x leveraged BTC long whale position has reached $182 million, with a liquidation price of $102,830

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