Bybit TradFi x Crypto Report: Deep dive into Strategy: Is MSTR valuation reasonable?

Strategy (NASDAQ: MSTR), previously known as MicroStrategy, is no longer being evaluated as a conventional software firm. Its transformation into a Bitcoin-centric holding company with over 592,000 BTC on its balance sheet, valued at more than $60 billion, has fundamentally altered its investment profile. The company’s strategy of issuing low-cost convertible debt and preferred equity in order to accumulate Bitcoin has effectively turned it into a leveraged Bitcoin proxy, amplifying both upside potential and downside risk.

In terms of valuation, is it worth investing in MSTR?

Strategy presents a unique valuation challenge in 2025. At a market capitalization of approximately $108 billion, the company is trading at a price-to-sales ratio exceeding 228x, based on trailing 12-month revenue of just $471 million. From a traditional equity valuation standpoint, this would be considered extremely overvalued.

In order to evaluate the intrinsic value of Strategy (MSTR), one can disregard the company’s legacy software operations and instead focus solely on its Bitcoin holdings net of debt. This net asset value (NAV) — defined as the total value of Bitcoin owned, less outstanding borrowings used to finance its purchases — serves as a proxy for the underlying economic value of the company’s dominant asset.