Since the launch of Strategy‘s preferred stock STRC, Bitcoin has lost more than 40% of its value. A brutal correction that is putting serious pressure on Michael Saylor‘s accumulation model and reigniting criticism over the long-term viability of the famous BTC flywheel.

STRC, designed to fund new Bitcoin purchases through capital raises, is now trading below its par value. A signal that mechanically slows down the BTC accumulation machine — and raises concrete questions about the resilience of the model over the long term.

Strategy remains one of the largest institutional holders of Bitcoin in the world. But between market pressure, analyst criticism, and slowing acquisitions, one question is impossible to ignore: is the flywheel still “fine”?

STRC Below Par Value: A Warning Signal for the Saylor Model

Strategy‘s mechanism is built on a straightforward logic: raise capital through financial instruments — common shares MSTR, convertible bonds, and now preferred stocks such as STRK and STRC — to buy Bitcoin. Rising BTC prices boost the balance sheet, enabling further capital raises, which fund even more BTC purchases. That is the flywheel.

But this virtuous cycle depends on the capital-raising instruments remaining attractive to investors. Right now, STRC is trading below its par value, meaning the market no longer prices this instrument at fair value. The direct consequence: Strategy can no longer issue new STRC shares on favorable terms without further diluting shareholders or accepting a significant discount.

Critics, long dismissed as a fringe minority, are gaining credibility. Some analysts are flagging the risk of a reverse leverage effect: if Bitcoin continues to fall, the value of the collateral shrinks, debt instruments become more expensive to refinance, and accumulation capacity contracts at precisely the moment when prices are at their lowest — the exact opposite of an optimal buying strategy.

Slowing BTC Purchases: The Numbers Speak for Themselves

Since the November 2024 peak, Strategy has significantly reduced the pace of its Bitcoin acquisitions. Weeks without a single purchase are becoming increasingly common, a stark contrast to the sustained buying cadence seen between mid-2024 and early 2025, when BTC was trading between $60,000 and $100,000. This slowdown is far from trivial: it directly reflects the difficulty of raising capital in an unfavorable market environment.

Strategy currently holds more than 500,000 BTC, acquired at an average purchase price of around $66,000 according to the company’s latest disclosures. With Bitcoin hovering around $80,000, the position remains theoretically in profit. However, MSTR‘s net asset value (NAV) — traditionally carrying a premium over the value of its BTC holdings — has compressed significantly, eroding one of the stock’s key selling points for institutional investors.

In derivatives markets, data from CoinGlass shows elevated short-term implied volatility on BTC, further complicating Strategy‘s calculations ahead of future issuances. Market sentiment remains fragile, and key support levels around $78,000 to $80,000 are being closely watched by traders.

Can the Flywheel Restart — and Under What Conditions?

For the Strategy model to regain full momentum, several conditions need to fall into place. First, a sustained recovery in Bitcoin‘s price above $90,000 to $95,000 would restore the attractiveness of its capital-raising instruments and allow STRC to reclaim its par value. Second, a renewed appetite among institutional investors for BTC-exposed products — particularly through spot ETFs — could support demand for Strategy‘s securities.

Michael Saylor continues to publicly maintain that the strategy is “fine”, arguing that Strategy has no obligation to sell its BTC and that the company holds sufficient liquidity to meet its short-term commitments. This posture of total conviction is his trademark — and it has already weathered far more severe corrections, including the 2022 bear market.

That said, the macroeconomic backdrop of 2025 is a different beast: interest rates remain elevated, regulatory uncertainty in the United States persists, and the crypto market is still searching for the catalysts that will define the next cycle. Saylor’s flywheel is not broken — but it is spinning in low gear, and every week without a BTC purchase is another week the thesis is put to the test.