Strategy (MSTR) formally, MicroStrategy, evolved from a legacy software business into the world’s first, largest, and most well-known Bitcoin treasury company. In 2020, Strategy co-founder Michael Saylor saw the writing on the wall – holding a large hoard of U.S. dollars was a poor long-term strategy. Saylor realized that endless government money printing would lead to a falling U.S. dollar and inflation. Initially a Bitcoin skeptic, Saylor changed his perception of the world’s largest cryptocurrency, understanding that Bitcoin has a fixed monetary policy, is decentralized, and has built-in scarcity. The results speak for themselves. After implementing a Bitcoin Treasury strategy, MSTR shares woke up from a multi-decade slumber and are up more than 220% over the past five years.
However, with great outperformance comes high volatility and large drawdowns. Investors can think of MSTR as a leveraged Bitcoin instrument. Because Bitcoin is already inherently volatile, drawdowns in Bitcoin can lead to bloodshed in MSTR shares. Over the past year, MSTR shares are down a painful 45% amid lower Bitcoin prices, liquidity, and debt servicing concerns.
After a 45% Drop, is Now the Time to Buy MSTR Shares?
Below are five reasons that the pain for MSTR bulls may soon come to an end:
Strategy: Insider Buyer Emerges
Strategy Director Carl Rickersten is seeing value here. Rickersten just made the first insider purchase of MSTR shares since May 2022. The director bought nearly $800k worth of shares, a sizable purchase and one that exhibits confidence on this dip.
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MSCI Index MSTR Removal Concerns are Quelled
MSCI, one of the largest index operators, was considering removing Bitcoin MSTR from its indexes. However, the company recently announced plans to keep MSTR in its indexes.
Crypto Sentiment Hit Multi-Year Lows
In late 2025, the CoinMarketCap Crypto Fear and Greed Index recorded its highest “Fear” reading in multiple years. A sentiment washout is a contrarian indicator that often signals a major market bottom.
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Dovish Federal Reserve Will Provide Liquidity
President Donald Trump is expected to announce his nominee to replace Federal Reserve Chair Jerome Powell. All four of President Trump’s Fed picks have “dovish” monetary policy stances. Typically, when monetary policy is easy, investors gravitate toward risk-on assets like Bitcoin
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MSTR Retreats to Long-Term Support
MSTR shares have retreated to a long-term area of support. In the short term, shares exhibit relative strength and are taking out the 50-day moving average, signaling a bullish trend change.
Image Source: TradingView
Bottom Line
MSTR’s aggressive Bitcoin treasury model has historically led to massive gains but also high volatility. However, recent insider buying, continued index inclusion, and a favorable shift in macro policy suggest the worst of the bloodshed is over.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
