Arthur Hayes believes Strategy stock is no longer the best way to gain exposure to bitcoin. According to the BitMEX co-founder, removing the premium once placed on MSTR stock weakens the financial process that allowed the company to issue securities and obtain more BTC. However, this analysis does not explain an immediate risk of insolvency. It is above all linked to Strategy’s ability to continue its growth without diluting its shareholders.
In brief
- Arthur Hayes believes that MSTR is no longer the best option for gaining exposure to Bitcoin.
- The disappearance of the mNAV bonus weakens Strategy’s accumulation mechanism.
- Strategy could resort to dilution, BTC sales or lower distributions.
- Its reserve of 3.75 billion dollars removes the risk of an immediate financial crisis.
- Bitcoin ETFs now appear to be a simpler alternative in Hayes’ eyes.
The disappearance of the bounty leaves Strategy with three options
In an interview with journalist Laura Shin, Arthur Hayes shared his reasoning. Bitcoin was therefore around $80,000, while Strategy’s mNAV based on enterprise value was moving near 1.01. Its variants (simple and diluted) reached 0.73 and 0.74 respectively on August 27.
The mNAV evaluates the capitalization of Strategy to that of its cryptos, in particular its bitcoins. If this ratio exceeds 1, the company can sell new securities at a price higher than the value of the equivalent BTC. Then, it uses the capital obtained after this sale to consolidate its reserve. The reduction in this premium makes this operation less advantageous and may trigger dilution.
Faced with this scenario, Hayes identifies three fundamental options for Michael Saylor:
- The issuance of new shares, with a significant risk of dilution for MSTR holders;
- The sale of a portion of the bitcoins, which would directly reduce the reserve at the origin of the group’s valuation;
- The reduction of certain distributions, at the risk of angering investors attracted by the returns of preferred shares.
For Hayes, this model can become fragile even without the collapse of bitcoin. Sustained stagnation is sufficient because it diminishes investor interest in a security that provides more complex and riskier exposure than a Bitcoin ETF.
Bitcoin sales are already no longer theoretical
Strategy currently owns 840,447 BTC, according to its official register. Their total acquisition amount is around $63.36 billion, or an average price of $75,385 per unit.
The company’s holdings were still at 847,363 BTC on June 22. They have since fallen by 6,916 BTC in less than two months. Strategy has a program that allows it to sell BTC to fund its dollar reserve.
Stratégy has developed a program which authorizes it to sell BTC to finance its dollar reserve, pay dividends and interest or repurchase certain shares. The company had already sold $218.4 million worth of bitcoin since the start of the year as of July 26.
This policy puts an end to the image of a company that would continually keep all of its BTC. However, it does not mean that Strategy is abandoning this accumulation model. Its reserves remain nearly 168,000 BTC higher than their level at the end of 2025.
Arthur Hayes, however, believes that Bitcoin ETFs currently offer a simple solution. A product like BlackRock’s IBIT directly tracks the value of BTC, without exposing the investor to debt, preferred shares, or Strategy’s own financial decisions.
Dollar reserve wards off immediate crisis
Strategy’s annual dividend and interest obligations peak at nearly $1.5 billion. This cost puts continued pressure on cash flow, but the company still has plenty of levers to cover it.
At the end of July, its dollar reserve was around $3.75 billion. This amount represented more than 25 months of dividend and interest coverage, according to second quarter results. The company also reduced its convertible debt from $8.21 billion to $6.71 billion.
Hayes’ warning therefore rests more on the future effectiveness of the model than on the survival of Strategy. When the mNAV sustainably recovers a premium, the company will resume issuing securities under more advantageous conditions. Otherwise, these financing mechanisms will become more in demand.
The progression of mNAV and the number of BTC per share will represent the main data to monitor. A simultaneous correction of these two indicators would confirm the weakening mentioned by Hayes. Their recovery would demonstrate, on the contrary, that Strategy still has its capacity to provide significant exposure to bitcoin.
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