Strategy Q4 Preview: Patience Wins, Accumulation Comes Later

Summary Bitcoin still looks late-cycle and in its drawdown phase. Even if Strategy stock has found an early floor, it is likely to remain range-bound until Bitcoin turns decisively higher. The key Q4 takeaway is dilution: MSTR's Bitcoin holdings rose about 5%, but the fully diluted share count rose nearly 8%, cutting Bitcoin ownership per share by roughly 2.5%. Patience is warranted, with gradual buying in mid-2026 and heavier accumulation closer to a likely late-2026 inflection. Since my last Strategy ( MSTR ) analysis , the stock has hit $140 per share from $390; though I haven't owned MSTR yet, I am considering accumulating aggressively throughout H2 2026. The price dynamics currently show that BTC peaked either in December 2024 when relative to gold or in October 2025 when relative to USD. Halving events historically show about a 12-month decline following the post-halving peak before the next bull phase. Either way, it will pay to be patient here with MSTR because even if the equity has hit an early bottom, it will likely be range-bound until BTC begins its upward inflection, which is most likely in H2 2026 when logically anchoring to USD. Q4 2025 Earnings Preview Strategy reports Q4 earnings after the close on Feb. 5, and your focus only really needs to be on BTC per share, liability durability in drawdowns, and management competence in capital allocation during this temporary “BTC premium” compression. We already can assume that BTC per diluted share fell in Q4. Strategy Based on the above, BTC holdings increased by about 5.1% in Q4 2025, while assumed diluted shares increased by 7.8%. The result is an approximate 2.5% decline in BTC per assumed diluted share. Strategy's financial engineering process means that the value of the shares rises when the “BTC yield” increases, which only comes from buying BTC faster than the fully diluted share count expands. Alternatively, management can opt to shrink the share count or retire conversion exposure. If you're buying MSTR, you need to keep a close eye on BTC. The following charts show a lot to be excited about in the near future. MSTR's 14-week RSI has dropped close to 30, but I think the stock has further to fall, unfortunately, or at least will be range-bound for a while, even if the majority of the pain may be over for this down-cycle. MSTR Weekly-Intervals Price Chart (Author's Chart) BTC/USD Weekly-Intervals Price Chart (Author's Chart) Bitcoin is also post-peak and late in the halving cycle, with price action now consistent with a mid-cycle drawdown. The 2024 halving occurred in April 2024, and we are now nearly 22 months post-halving. Usually that would mean we are in riskier territory, though the “halving dynamics” were not typical this time around. I believe there is a case for Bitcoin picking up long-term institutional demand that is going to break the typical “boom-bust” patterns we have seen around halvings in the past, but that may take more time to gradually become the norm. If you just look at the following chart, you can see just how cheap BTC has become relative to gold. That makes it a contrarian buy at this very moment in time. Bernstein Historically, the peak of BTC prices post-halving has occurred 12 months before the bottom. Bitcoin's next cycle bottom is therefore logically around now if we look at gold-relative valuation. BTC/Gold Weekly-Intervals Price Chart (Author's Chart) However, if we are to use the BTC-USD measure, which is more likely how BTC will be priced, it would be Q4 2026. Either way, we are in the drawdown window, and I would say being a bit more patient here, perhaps accumulating slowly in mid-2026 and aggressively in Q4 2026, is wise. BTC/USD Weekly-Intervals Price Chart (Incl. BTC Halvings) (Author's Chart) Fundamentals Strategy's balance sheet structure is mainly liabilities consisting of unsecured convertible notes and perpetual preferred equity. This reduces the risk of forced BTC sales in a drawdown and shifts the risk to refinancing and cash carry. As of September 30, 2025, the convertible stack of $8B was concentrated in low-coupon or zero-coupon instruments. There's an obvious trade-off here, which is that holders of these bonds essentially have puts on the equity. Strategy 10-Q On the other hand, the preferred stack is a real economic constraint and expensive for the company to maintain. Most of this capital is cumulative, meaning unpaid dividends compound into a growing senior claim. Dividends are paid at the issuer's discretion and rank junior to all bonds. Contrary to the below, STRC's dividend is now at 11.25% , as its dividend is variable. Strategy 10-Q Management is protecting the balance sheet by building a strong USD reserve, which as of January 4, 2026, stood at $2.25 billion and is explicitly intended to fund interest and preferred dividends. The main question of concern during drawdowns is how many quarters of dividend obligations and refinancing needs have to be met from cash and operating inflows without issuing common stock at distressed prices or selling Bitcoin. Lower BTC per share during these down periods is likely, but BTC per share will also rise during the good times, hence the “levered BTC” effect from MSTR equity. Ideally, common equity should only be issued when it increases Bitcoin per fully diluted share. Low-cost converts should be preferred when available, and even these ought only to be used if Bitcoin acquired net of the dividend obligations improves long-run per-share ownership. Albeit, this is a hard game for management to win and requires elite strategic discipline and precision, not to mention consistency and timing. Unfortunately, per-share BTC diluted in Q4, while the marginal cost of preferred capital rose; this was evidenced by the STRC dividend reset to 11.25% . Under GAAP accounting, reported results will be highly volatile and largely driven by quarter-end BTC prices. Removing those mark-to-market considerations, Q4 likely saw a decline in Bitcoin ownership per share alongside heavier outstanding claims. That means that intrinsic value per share likely dropped, and while this may be the sentiment bottom, it's going to be a while before the upward inflection begins. That's why my rating is Hold for now. Conclusion: Hold The distinction between gross BTC exposure and per-share value matters most for Strategy at this stage of the cycle. Q4 2025 is already known to have been dilutive on a BTC-per-share basis, and capital markets execution could become more constrained as the BTC NAV premium compresses in the next several months if the BTC price follows the dollar-comparative dynamics rather than gold-comparative. Either way, I feel more assured accumulating in H2 2026 rather than now, with the latest possible bottom likely in Q4 2026. Now is just slightly too early, in my opinion. Strategy's unsecured converts and perpetual preferred provide flexibility through drawdowns, and the $2.25B USD reserve extends runway, but there is refinancing risk to be aware of, which could further pressure the valuation in the near term. Undeniably, we're in the trough, but I'd argue against the fact that this is the de facto bottom. Even if it is for MSTR, it likely isn't yet for BTC. That means that MSTR will be range-bound for months before the light of day arrives. I'd rather be patient here and hold some cash at the ready and accumulate when I'm sure the inflection is imminent.