GameStop price

introduction As of mid-2025, more and more publicly traded companies are starting to include cryptocurrencies, especially Bitcoin, in their asset allocations in their corporate vaults, inspired by the success story of Strategy ($MSTR). For instance, according to blockchain analytics data, in June 2025 alone, 26 new companies included Bitcoin in their balance sheets, bringing the total number of companies holding BTC globally to about 250. These companies span multiple industries (technology, energy, finance, education, etc.) and different countries and regions. Many companies view Bitcoin's limited supply of 21 million as a hedge against inflation, emphasizing its low correlation with traditional financial assets. This strategy is quietly moving into the mainstream: as of May 2025, 64 companies registered with the SEC hold a total of about 688,000 BTC, representing about 3–4% of the total Bitcoin supply. Analysts estimate that more than 100–200 companies worldwide have included crypto assets in their financial statements. A model for crypto asset reserves When a publicly traded company allocates a portion of its balance sheet to cryptocurrencies, a core question arises: how do they finance the purchase of these assets? Unlike traditional financial institutions, most companies that adopt crypto vault strategies do not rely on their main business with abundant cash flow to support. The next analysis will use $MSTR (MicroStrategy) as a major example, as most other companies are actually copying its patterns as well. Operating Cash Flow While the theoretical most "healthy" and least dilutive way to buy crypto assets is through the free cash flow generated by the company's core business, this method is almost impossible in practice. Most companies themselves lack sufficiently stable and large-scale cash flow to simply accumulate large reserves of BTC, ETH, or SOL without resorting to external financing. Take MicroStrategy (MSTR) as a typical example: the company was founded in 1989 as a software company focused on business intelligence, and its main business included products such as HyperIntelligence and AI analytics dashboards, but these products still generate limited revenue. In fact, MSTR's annual operating cash flow is negative, a far cry from the tens of billions of dollars it has invested in Bitcoin. It can be seen that MicroStrategy's crypto vault strategy is not based on internal profitability from the beginning, but relies on external capital to operate. A similar situation has been seen with SharpLink Gaming (SBET). The company transformed into an Ethereum treasury carrier in 2025, purchasing more than 280,706 ETH (approximately $840 million). Obviously, it couldn't rely on the revenue from its B2B gaming business to make it happen. SBET's capital formation strategy relies primarily on PIPE financing (private investment in public equity) and direct equity issuance rather than operating income. Capital market financing The most common and scalable way for listed companies that adopt crypto vault strategies is through public offerings, which raise funds through the issuance of stocks or bonds and use the proceeds to purchase crypto assets such as Bitcoin. This model allows companies to build large-scale crypto vaults without using retained earnings, and draws entirely on the financial engineering methods of traditional capital markets. Issuing shares: a traditional dilutive financing case In most cases, issuing new shares comes with costs. When a company raises funds through the issuance of additional shares, two things usually happen: Diluted ownership: The original shareholder's shareholding in the company decreases. Lower earnings per share (EPS): An increase in total equity leads to a decrease in EPS while net income remains unchanged. These effects often lead to a decline in stock prices for two main reasons: Valuation logic: If the price-to-earnings (P/E) ratio remains the same and EPS declines, the stock price will also fall. Market psychology: Investors often interpret financing as a lack of funds or distress, especially when the funds raised are used for unproven growth plans, and the influx of new shares into the market can also drive down market prices. One exception: MicroStrategy's anti-dilutive equity model MicroStrategy (MSTR) is a classic counterexample of deviating from the traditional narrative of "equity dilution = shareholder damage". Since 2020, MSTR has been actively purchasing Bitcoin through equity financing, with its total outstanding shares growing from less than 100 million shares to over 224 million shares by the end of 2024 Despite the dilution of equity, MSTR tends to outperform Bitcoin itself. Why? Because MicroStrategy has been in a state of "market capitalization higher than its net value of Bitcoin", which is what we call mNAV > 1. = Understanding Premium: What is mNAV? When the mNAV > 1, the market valuates MSTR above the fair market cap of its Bitcoin holdings. In other words, investors pay more per unit than they would cost to buy BTC outright when they gain exposure to Bitcoin through MSTR. This premium reflects market confidence in Michael Saylor's capital strategy and may also represent the market's perception that MSTR offers leveraged, actively managed BTC exposure. Supported by traditional financial logic Although mNAV is a crypto-native valuation metric, the concept of "trading at a higher price than the value of the underlying asset" has long been prevalent in traditional finance. There are several main reasons why companies often trade at prices higher than book value or net assets: Discounted cash flow (DCF) valuation method Investors are concerned about the present value of a company's future cash flows, not just their current holdings. This valuation method often results in a company trading at a price much higher than its book value, especially in the following scenarios: Revenue and margins are expected to grow The company has pricing power or a technical/commercial moat 📌 Example: Microsoft's valuation is not based on its cash or hardware assets, but on its future stable subscription software cash flows. Earnings and Revenue Multiples Valuation (EBITDA) In many high-growth industries, companies typically use P/E (price-to-earnings ratios) or revenue multiples for valuation: High-growth software companies may trade at multiples of 20–30 times EBITDA; Early-stage companies may trade at multiples of 50 times revenue or more, even if they are not profitable. 📌 Example: Amazon had a price-to-earnings ratio of 1078x in 2013. Despite the meager margins, investors are betting on its future dominance in e-commerce and AWS. MicroStrategy has an advantage that Bitcoin does not have: a corporate shell with access to traditional financing channels. As a U.S.-listed company, it can issue stocks, bonds, and even preferred equity to raise cash, and it does, and it works amazingly. Michael Saylor has cleverly used this system: he has raised billions of dollars by issuing zero-percent convertible bonds and, more recently, an innovative preferred stock product, and put all of that money into Bitcoin. Investors recognize that MicroStrategy is able to buy Bitcoin on a large scale using "other people's money," an opportunity that is not easily replicated by individual investors. MicroStrategy's premium is "not related to short-term NAV arbitrage", but comes from the market's high trust in its ability to access and allocate capital. How mNAV > 1 achieves backdilution When MicroStrategy trades above the net asset value of its Bitcoin holdings (i.e., mNAV > 1), the company can: Issue new shares at a premium Use the proceeds to buy more Bitcoin (BTC) Increase your total BTC holdings Promote the simultaneous rise of NAV and enterprise value Even with an increase in outstanding shares, BTC/share holdings per share may remain stable or even rise, making issuing new shares an anti-dilution operation. What happens if mNAV < 1? When mNAV < 1, it means that every dollar of MSTR stock represents a BTC market cap of more than $1 (at least on paper). From a traditional finance perspective, MSTR is trading at a discount, i.e., below its net asset value (NAV). This will bring challenges in capital allocation. If the company uses stock financing to buy BTC in this case, from the perspective of shareholders, it is actually buying BTC at a high price, thereby: Diluted BTC/share (BTC holdings per share) and reduce existing shareholder value When MicroStrategy faces an mNAV < 1, it will not be able to continue to maintain the flywheel effect of "issuing new shares → buying BTC → increasing BTC/share". So what are the options at this time? Buy back shares instead of continuing to buy BTC When the mNAV < 1, buying back MSTR shares is a value-accretive behavior for reasons such as: You're buying back shares at a price lower than their BTC intrinsic value As the number of outstanding shares decreases, BTC/share will rise Saylor has made it clear that if the mNAV is below 1, the best strategy is to buy back shares rather than continue buying BTC. Method 1: Issuance of Preferred Stock Preferred stock is a hybrid security that sits between debt and common stock in a company's capital structure. It typically offers fixed dividends, no voting rights, and priority over common stock in the event of profit distribution and liquidation. Unlike debt, preferred stock does not need to repay the principal; Unlike common stock, it offers more predictable income. MicroStrategy has issued three classes of preferred stock: STRK, STRF, and STRC. STRF is the most straightforward instrument: it is a non-convertible perpetual preferred stock that pays a fixed cash dividend of 10% annualized at $100 par value. It does not have an equity conversion option and does not participate in the stock rise of MSTR, providing only yield. The market price of STRF fluctuates around the following logic: If MicroStrategy needs financing, it will issue additional STRF to increase supply and lower prices. If the market demand for income surges (such as during periods of low interest rates), the price of STRF will rise, thereby reducing the effective yield. This creates a self-adjusting price mechanism with a generally narrow price range (e.g., $80–$100), driven by yield demand and supply and demand. Example: If the market demands a 15% yield, the STRF price may drop to $66.67, and if the market accepts 5%, it may rise to $200. Since STRF is a non-convertible, essentially non-redeemable instrument (unless it encounters a tax or capital trigger), it behaves like a perpetual bond, and MicroStrategy can use it repeatedly to "buy the dip" of BTC without refinancing. STRK is similar to STRF with an annualized dividend of 8% but with the addition of a key feature: when MSTR's stock price exceeds $1,000, it can be converted into common stock at a 10:1 ratio, which is equivalent to embedding a deep out-of-the-money call option, providing holders with long-term upside opportunities. STRK is highly attractive to companies and investors alike for several reasons: Asymmetric Upside Opportunities for MSTR Shareholders: STRK per share is priced at approximately $850, and 10 shares can raise $850; If converted into 1 share of MSTR in the future, it is equivalent to the company buying BTC at a price of $850 at the current price, but it will only be diluted if the MSTR stock price rises by more than $1,000. Therefore, it is non-dilutive during the MSTR < $1,000, reflecting the appreciation brought about by previous BTC accumulation even after conversion. Income self-stabilization structure: STRK pays $2 quarterly at an annualized rate of $8; If the price drops to $50, the yield rises to 16%, attracting buying to support the price. This structure makes STRK behave like a "bond with options": defend on the downside and engage on the upside. Investor Motivation and Conversion Incentives: When MSTR stock price breaks above $1,000, holders have an incentive to convert to common stock; As MSTR rises further (e.g., to $5,000 or $10,000), STRK's dividend becomes negligible (yield only about 0.8%), accelerating the conversion; Finally, a natural exit channel is formed, transforming temporary financing into a long-term shareholder structure. MicroStrategy also reserves the right to redeem STRK, subject to conditions such as less than 25% of the remaining outstanding shares or special triggers such as taxation. In the order of liquidation, STRF and STRK outperformed common stock, but below debt. These tools are especially important when companies are in an mNAV < 1 situation. Because issuing common shares at a discount dilutes BTC/share, thereby reducing the value. Preferred shares like STRF and STRK allow companies to continue raising funds without diluting common shares, whether it is used to continue buying Bitcoin or buying back shares, maintaining the stability of BTC/share while expanding assets. How do they pay interest (dividends)? As of the 2025 YTD, MicroStrategy has raised $6.6 billion through ATM (At-The-Market) stock offerings, far covering the $185 million in fixed interest and dividend costs it needs to pay annually. When mNAV > 1, paying preferred stock dividends through equity offerings does not dilute BTC per share, as the BTC increment from the funds raised exceeds the unit dilution. Additionally, the exemption of preferred stock from debt allows MicroStrategy to continue expanding its balance sheet without deteriorating its net debt ratio, which is crucial for maintaining market confidence in its capital structure. When mNAV > 1 Convertible Bond A convertible bond is a corporate debt instrument that gives creditors the right (but not the obligation) to convert a bond into shares in the issuing company at a predetermined price (known as the conversion price) in the future, so it is essentially a bond + call option structure. This tool is commonly used in mNAV > 1 scenarios, as it is particularly suitable for accumulating Bitcoin. Take MicroStrategy's 0% convertible bond as an example: no interest is paid during the life of the bond; Only the principal needs to be repaid at maturity (unless the investor chooses to convert to shares); For MSTR, this is a highly capital-efficient way to raise billions of dollars to buy Bitcoin without instant dilution or interest burdens, with the only risk of repaying the principal if the stock price underperforms in the future. Case 1: The stock price rose more than expected MicroStrategy issued convertible bonds to investors; The company received an immediate $3 billion in funds to purchase Bitcoin; Since the bond has a 0% interest rate, MicroStrategy does not pay interest over the life of the bond; If the MSTR stock price rises, it exceeds the conversion price threshold; Investors choose to convert bonds into stocks, or recover the principal; Instead of paying cash principal, MicroStrategy delivers through the issuance of new shares. Case 2: The stock price fell and did not reach the conversion price MicroStrategy issued convertible bonds to raise funds to purchase Bitcoin; The bond has a 0% interest rate, and the company does not pay interest over its lifetime; MSTR stock price continues below the conversion price; Investors will not exercise the conversion because the conversion will cause losses; When the bond matures, the company needs to repay the entire principal in cash; If cash reserves are insufficient, MicroStrategy may need to refinance to repay its debts. It's worth emphasizing that convertible bonds are essentially a combination of "regular bonds + call options," especially in the case of MicroStrategy (MSTR). The company consistently issues convertible bonds with 0% annual interest, which means that investors have no interest income at all over the bond period. So why are savvy institutional investors willing to accept such a "low attractiveness" structure? The answer lies in the embedded call option: this embedded call option is especially valuable when the market expects higher MSTR implied volatility, as the higher the expected price volatility, the higher the value of the option that captures the upside opportunity. We observed that Bitcoin's implied volatility (IV) is typically between 40% and 60% over different periods. Since MicroStrategy's stock price is highly correlated with Bitcoin, this higher BTC IV indirectly inflates the valuation of MSTR stock options. Currently, the at-the-money call option (strike price of around $455) is trading at the 45% IV level, while the corresponding put option IV is higher, indicating a strong market expectation for future volatility. This high volatility environment significantly increases the value of embedded call options in MSTR convertible bonds. Essentially, MicroStrategy is actually "selling" this call option to investors at a high premium. Because the more volatile the price of the underlying asset, the higher the probability of the option being "in-the-money" when it expires, which makes the call option more expensive during periods of high volatility. From an investor's point of view, this is acceptable because they are actually buying a leveraged volatility bet: if the MSTR stock price rises significantly, they can convert it into shares and make huge gains; If the stock price does not rise, bondholders can still recover their principal at maturity. For MSTR, this is a win-win: on the one hand, it can be financed without paying interest, without immediate dilution of equity; On the other hand, if the Bitcoin strategy is successful, it can service or refinance this debt only through a rise in the stock price. Under this framework, MSTR is not just financing bonds, but "monetizing volatility", exchanging future rising expectations for cheap funds at the moment. Gamma Trading Gamma Trading is a core mechanism for the sustainability of MicroStrategy's capital structure, especially in the context of its repeated issuance of convertible bonds. The company has issued billions of dollars in zero-coupon convertible bonds, and its main attraction is not from the traditional fixed income, but from the call option value embedded in the bonds. In other words, investors do not care about the interest income of the bond itself, but about the transactionality and volatility arbitrage space of the option components. These bonds are not bought by long-term creditors in the traditional sense, but by hedge funds with market-neutral strategies. Such institutions are widely engaged in so-called Gamma Trading, and their investment logic is not "buy and hold", but relies on constant hedging and rebalancing to capture profits in fluctuations. Gamma Trading Mechanism in MSTR: Basic Trading Structure: Hedge funds buy MicroStrategy's convertible bonds (essentially bonds + call options); At the same time, short the corresponding amount of MSTR shares to maintain delta-neutral. Why was it established? If MSTR stock price rises, call options in bonds will increase faster than losses caused by short stocks; If the stock price falls, the short position will profit faster than the bond will lose; This symmetrical return structure allows hedge funds to profit from volatility rather than directional changes. Gamma and Rebalancing Mechanisms: As stock prices fluctuate, hedge funds need to dynamically adjust their short positions to maintain delta neutrality; The initial hedge is set at the delta value of the bond, for example, if the delta of a convertible bond is 0.5, the foundation shorts the equivalent of $50 of MSTR shares to hedge the $100 bond; However, when the stock price continues to fluctuate, the delta of the convertible bond itself will also change (i.e., the embodiment of Gamma), and the fund needs to continue to dynamically rebalance: Stock prices rise, delta increases (bonds behave more like stocks) → add short positions; Stock prices fall, Delta decreases (bonds behave more like bonds) → Cover short positions; This constant "sell on the high, buy on the dip" hedging transaction is called Gamma Trading. In the meantime, the bond delta changes non-linearly with the stock price, and you need to constantly adjust your short position to remain neutral. Green curve: return on holding convertible bonds; Red line: return of short stocks; The subtraction of the two gives the net income P&L; When the stock is trading sideways near the conversion range, frequent hedging can lead to losses, which is known as the "cost zone" of Gamma Trading (shaded in the figure). Impact on MSTR premium: These Gamma hedgers are not long-term holders When MSTR stock reaches the conversion price of convertible bonds, Delta → 1, Gamma drops to extremely low; If volatility declines or spreads narrow and Gamma trades lose money, these funds will exit the market, weakening demand for convertible bonds. Second-Order Effects: MicroStrategy's convertible bonds typically have zero coupons, but have a longer duration → low Theta (time value decay); When volatility is too low, Gamma trades are no longer profitable, Gamma PnL ≪ Theta loss (time loss); The sale of convertible bonds will become difficult, affecting their ability to raise funds. The contrast of Short Float illustrates the dominance of this strategy: Short float refers to the percentage of a company's total outstanding shares that are shorted. We observed that MicroStrategy has a high short float due to its large number of convertible bond issuances, as funds that do Gamma Trading often need to short MSTR shares for delta-neutral hedging. In contrast, SBET does not issue convertible bonds, but relies on PIPE private financing and ATM market-based issuance mechanism, and lacks structural arbitrage opportunities for convertible bonds + options, so the short float is significantly lower. SBET's financing structure is also closer to traditional financing and cannot attract large-scale arbitrage institutions to participate. manifestation I tracked and analyzed the stock price reactions of 12 publicly traded companies after announcing their crypto asset allocations in 2025. Our dataset includes stock price data before and after the announcement date, candlestick chart visualizations, and key performance indicators. The stock price reaction after the first crypto vault announcement in 2025 was, on average, explosive, short-term, but still delivered positive cumulative returns. Among the 12 publicly traded companies, the average 1-day return was +103.17%, showing a strong immediate response from investors. The 5-day return surged further to +285.92%, with a pullback on day 10 and finally stabilizing at +102.03%. While some companies have been flat or even negative, several of them have experienced extreme stock price spikes. Example 1: BitMine Immersion Technologies Inc. (NYSE-American: BMNR) It is a Las Vegas-based blockchain infrastructure company that operates industrial-grade Bitcoin mining farms, sells immersion cooling hardware, and provides custody services for third-party devices in low-cost areas such as Texas and Trinidad. On June 30, 2025, the company issued 55.6 million shares priced at $4.5 per share through a private placement, raising a total of approximately $250 million to expand its Ethereum treasury. Following the announcement, BMNR stock price skyrocketed from $4.27 to a high of $161, marking a whopping +3,674.9% increase in 3 days. This epic surge is likely driven by a thin float, high retail enthusiasm, and FOMO momentum. Despite the subsequent sharp correction, the cumulative two-week gain is +882.4%. This incident underscores the positive feedback from the market towards the "MicroStrategy-style" high-belief crypto vault strategy. Example 2: SharkLink Gaming Ltd. (Nasdaq: SBET) Founded in 2019, SharpLink is an online technology company focused on converting sports fans into bettors, with a platform that pushes sports betting and interactive gaming offers to users based on timeliness. The company began accumulating ETH on its balance sheet in 2025, funded through PIPE (private financing) and ATM (mark-to-market increase). The stock initially reacted extremely strongly: SBET rose +433.2% on the first day and reached a high of +1,747% on the 4th trading day. The surge is driven by the scale of crypto asset allocation and the backing of the big guys behind the transaction. Retail investors, crypto funds, and speculative traders flocked to push the stock price above $120. However, the rally was short-lived. On June 17, SharpLink filed an S-3 registration statement with the SEC, making it possible for PIPE investors to resell their shares, causing widespread confusion. Many people mistakenly believe that major shareholders are shipping. While Joseph Lubin, co-founder of Consensys and chairman of SBET, later clarified that "no shares have been sold yet," it was too late: SBET shares plummeted nearly 70%, nearly erasing most of the gains after the announcement. Despite the sharp pullback, SBET's cumulative gain stands at +227.2%, indicating that the market is still giving significant long-term value to its ETH vault strategy. Retraced from the highs, but in the following weeks the stock began to regain financial support, indicating that the market's confidence in the "Ethereum as a reserve asset" model is picking up. Example 3: Bit Digital Inc. (Nasdaq: BTBT) BTBT is a New York-based digital asset platform founded in 2015 that initially operates Bitcoin mining farms in the United States, Canada, and Iceland. In June 2025, the company completed an underwriting additional offering, raising approximately $172 million and reallocating capital to ETH through the additional proceeds from the sale of 280 BTC, purchasing a total of approximately 100,603 ETH, officially completing the transformation to an Ethereum staking and vault model, with crypto veteran Sam Tabar as CEO. The initial market reaction was weak (down -15% on the first day), but the stock price gradually rose over the next two weeks, eventually reaching a +91% increase. This moderate reaction may reflect the market's familiarity with BTBT's background in crypto mining operations. However, the cumulative return of +34% still shows that even established crypto companies can still gain positive market recognition for further expanding their crypto asset allocation. Example 4: GameStop Corp. (Nasdaq: GME) However, GameStop (GME) announced its first Bitcoin purchase in May 2025 and plans to further transform into a consumer-grade gaming infrastructure company related to cryptocurrencies. Despite the high level of attention from retail investors and the symbolism of the culture-level meme stock's foray into crypto assets, GME returned negative on both the 5th and 10th days after the announcement. This performance difference reveals a core insight: crypto news alone is not enough to sustainably drive stock prices higher. GameStop's Bitcoin layout has been questioned by the market due to the continued shrinking of its retail business, and this transformation comes after multiple strategic shifts (such as stores, NFTs, metaverses, etc.). It failed to sustain its upward trend, reflecting market doubts about its fundamentals and strategic uncertainties. The company's core revenue is still declining, and management has not proposed any substantive reform plans other than "buying Bitcoin". The message is also chaotic, from stores, NFTs, metaverse to today's cryptocurrencies, the strategy is wavering, seriously weakening market confidence. Cryptocurrency asset allocation trends In addition to Bitcoin, more and more companies are starting to use Ethereum (ETH) as the main asset for their cryptocurrency reserves. The reasons are manifold. Firstly, Ethereum is widely regarded as the underlying infrastructure for real-world asset (RWA) tokenization platforms, with protocols such as Ondo, Backed Finance, and Centrifuge building institutional-grade financial products on the Ethereum settlement layer. This makes ETH a strategic reserve asset for companies betting on the "traditional finance on-chain" trend. Secondly, unlike Bitcoin, Ethereum is a stakeable interest-bearing, DeFi composable asset that allows holders to earn approximately 3–4% APY by participating in network security. This gives ETH a programmable, interest-bearing treasury that is highly attractive to CFOs looking to optimize their idle cash returns. On July 14, 2025, BTCS borrowed 2.34 million USDT through Aave, a decentralized lending protocol, plus some of its own cash, totaling 2,731 ETH, worth approximately $8.24 million, further expanding its Ethereum holdings. This leveraged transaction brought the total ETH holdings of BTCS to 31,855, increasing the company's overall crypto+cash market capitalization to $100.6 million. This case clearly demonstrates Ethereum's unique dual role as both collateral and capital in DeFi. Bitcoin is more of a "cold wallet" passive asset, which may need to be wrapped to participate in DeFi. ETH is a native composable asset that businesses can use for lending, staking, or participating in yield protocols without selling the asset. The launch of Ethereum spot ETFs has further bolstered institutional confidence and liquidity in ETH, with net subscription inflows indicating a gradual acceptance of ETH in mainstream financial markets. As a result, SharpLink (SBET), Bit Digital (BTBT), and even some unlisted companies are adjusting their balance sheets and increasing their ETH holdings, which is not only a speculative bet, but also an expression of a long-standing belief that "Ethereum is the underlying facility of decentralized capital markets." This trend marks a significant shift in crypto businesses' asset allocation strategies: from "Bitcoin = digital gold" to "Ethereum = digital financial infrastructure." Here are a few examples of this diverse configuration: XRP as a Reserve Asset: VivoPower International (NASDAQ: VVPR) raised $121 million in May 2025, led by a Saudi prince, becoming the first publicly traded company to adopt an XRP reserve strategy. Shortly after, Singapore's Trident Digital Holdings (TDTH) announced plans to issue up to $500 million in shares to build XRP reserves; China's Webus International (WETO) has also submitted an application to put $300 million into its XRP holdings and plans to integrate Ripple's cross-border payment network into its business system. While XRP rose in mid-2025, the performance of related stocks was divided, but these actions showed that crypto asset allocation is surpassing the traditional dual main line of BTC and ETH. Litecoin (LTC) Reserve: MEI Pharma (MEIP), a small biopharmaceutical company, unexpectedly announced its transformation in July 2025, raising $100 million through participation from Litecoin founder Charlie Lee and the Litecoin Foundation to create the first institutional-grade LTC reserve solution. This plan is accompanied by a management change (Lee joins the board), which is seen by the market as an attempt to inject high numbers into the struggling biomedical industry with crypto capital. The stock price skyrocketed after the news of "Biopharma + Litecoin", but the stock price fluctuated wildly as investors doubted its final business model. HYPE Token Reserves: A more "heterogeneous" case comes from Sonnet BioTherapeutics (SONN), which announced a $888 million reverse merger in July 2025 to form Hyperliquid Strategies Inc., planning to include $583 million in HYPE tokens on the company's balance sheet. The deal, backed by mainstream crypto venture capitalists like Paradigm and Pantera, aims to create the world's largest listed entity with HYPE token holdings. SONN's stock price skyrocketed after the announcement (because HYPE is a popular token), but analysts point to its complex structure and the token itself is still in its early stages. Similarly, Lion Group (LGHL) has secured a $600 million credit facility to reserve tokens like HYPE, Solana, and Sui, creating a multi-asset crypto vault. When will Saylor sell coins? Michael Saylor has publicly stated that MicroStrategy will "HODL" its Bitcoin assets forever, meaning the company has no intention of selling its BTC reserves at all. In fact, MicroStrategy has even revised its corporate policy to formally establish Bitcoin as its primary treasury reserve asset, meaning it is an extremely long-term holding plan. However, in the real world of corporate finance, "never sell" is not absolute. In some scenarios, MicroStrategy may be forced to sell a portion of Bitcoin. Understanding these potential scenarios is crucial as they form a risk factor in the entire "MicroStrategy as a Bitcoin Proxy Asset" investment logic. Here are some scenarios that could challenge MicroStrategy's resolve and "force" it to sell BTC: Significant debt maturities under a tight credit market: MicroStrategy currently has a number of outstanding debts, including convertible bonds maturing in 2028 and 2030 (which have previously been redeemed through stock issuances), and may also include other loans. Typically, companies refinance to pay off old debts – issuing new bonds or new shares. In early 2025, MicroStrategy successfully redeemed its 2027 convertible bonds with shares, avoiding cash outlays. But imagine a scenario: in 2028, when Bitcoin is in a bear market, MicroStrategy stock price plummets, interest rates are high (new financing is too expensive), and the company may face a cash flow crisis if $5–1 billion in debt matures. In this case, traditional capital markets may "close" the door, especially if the implied volatility (IV) is too low, causing no investors to be willing to buy convertible bonds embedded with the value of the options, and MicroStrategy's best financing tool will be ineffective. In the face of such a credit crunch, companies will likely only be able to sell some BTC to pay off their debts, as if they were "forced to close their positions." Although MicroStrategy has a huge BTC (worth more than $70 billion by 2025), once it is used, market confidence is bound to be shaken. This sale is likely to be the last option and will only take place if all other funding avenues fail. High interest burden or preferred stock dividend pressure: MicroStrategy's financing structure, while flexible, is not without its costs. In 2025, the fixed expenses the company faces include: STRK 8% APR (payable in cash or stock) STRF 10% p.a. (must be paid in cash, penalty for default) STRC Monthly Interest Rate 9–10% (cash payable, board adjustable) Convertible bond interest (e.g. 2030 coupon of 0.625%) Total fixed liabilities exceed $180 million per year and are likely to continue to rise with subsequent financing. If MSTR stock price is down, direct equity financing will cause severe dilution. If it enters the crypto winter, MicroStrategy may continue to burn money by maintaining cash dividends from STRF and STRC. If BTC is in a downturn for a long time, the company's leverage structure becomes dangerous. The board may decide to sell a portion of Bitcoin to "buy time" to provide cash flow for interest or dividends over the next one to two years. This is counterproductive, but it's better than defaulting or triggering the STRF cumulative default mechanism. What if interest rates continue to rise? Then all future financing will become expensive: The new issue of preferred stock must offer higher yields (e.g., >10%) to attract investors; Convertible bonds must be paired with higher implied volatility to be accepted by the market (often difficult to achieve in bear markets); If MSTR stock price is down, direct equity financing will cause severe dilution. In other words, the cost of capital has risen, but revenue has not grown, and BTC is at a low level. Summary: MicroStrategy is only possible to sell coins under extreme pressure or strategic shifts. These scenarios are often related to financial stress: debt is difficult to roll over, the cost of capital is too high, or the market is valuing the company at a discount. Normally, Saylor's strategy is to continue to buy or hold rather than sell. In fact, the company has long shown this firmness: during the crypto market crash in 2022–2023, MicroStrategy did not sell BTC like Tesla. Instead, it quietly repurchased some convertible bonds in the secondary market, achieving "discount repayment", giving priority to other means at all times, and reluctant to sell Bitcoin, because once the coin is sold, the entire story of the "Bitcoin treasury" will collapse and market belief will be shaken. summary MicroStrategy (MSTR) has pioneered a new corporate finance model, transforming a publicly traded operating company directly into a leveraged Bitcoin holding vehicle. Through aggressive use of capital market instruments, particularly zero-coupon convertible bonds, MSTR has financialized its stock volatility, accumulating more than 600,000 Bitcoins without relying on the cash flow of its main business. Its core mechanism is simple yet powerful: when the company's stock price is at a premium to BTC's net assets (mNAV) (i.e., mNAV > 1), it is financed by issuing shares or convertible bonds (such as the "21/21" or "42/42" plan), and then all the proceeds are exchanged for BTC. As MicroStrategy's stock price has been above its BTC market cap for a long time, this cycle has continued and achieved an increase in "holdings per share" while raising funds. At the center of this model, convertible bonds play a pivotal role: they combine the downside protection of bonds (debt bottom) with the upside potential of stocks (embedded call options). In a highly volatile environment (such as 2025), investors are even willing to accept 0% interest simply because the option value is high enough. In essence, MSTR is not just issuing bonds to raise funds, but is "selling volatility" and selling at a premium. The market is willing to pay in advance for this future growth potential, allowing companies to continuously finance coins without paying interest or immediately diluting shareholders. But this model also has limitations: once implied volatility contracts (whether due to market maturity or BTC's lack of momentum), the value of embedded options will decrease, and future re-issuance of convertible bonds will be significantly less attractive, and companies will have to rely on traditional financing methods or repay debt in cash when it matures. At the same time, the "Gamma traders" and volatility arbitrageurs who underpin the MSTR funding ecosystem are opportunists, and once volatility decreases or market sentiment changes, the demand for their securities can quickly dry up. This is not "delta risk" (everyone knows that MSTR is a BTC proxy), but "low gamma risk", that is, a small change in volatility expectations can cause the entire financing mechanism to fail. Nonetheless, investing in MicroStrategy has become a new trend among institutional funds versus retail investors, who see it as a trading alternative to Bitcoin's rise. This speculative psychology is also reflected on-chain: users keep buying meme tokens associated with "crypto treasury companies" or trading stocks like MSTR, SBET, etc. to bet on narratives. Whether it's traditional markets or DeFi, the logic behind it is the same: crypto treasury companies represent a highly volatile, highly leveraged alternative exposure to BTC that can even exceed the original asset itself if timed right. In short, MicroStrategy does not just use Bitcoin as a reserve, but builds a new financial structure around it. It is the first successful "crypto treasury company" and may define a new paradigm for how companies allocate treasury assets, monetize volatility and create shareholder value in the future, setting a benchmark in the Bitcoin-dominated world of finance.