Strategy (formerly MicroStrategy), known as a Bitcoin treasury company, has released a new metric called ‘Net Reserves,’ which shows the actual value of Bitcoin holdings excluding the impact of debt and preferred shares. This is due to a shift in funding from convertible bonds to preferred shares, and changes in business structure where traditional metrics can no longer accurately measure shareholder attributable value.

The Real Value of Shareholder Attribution Indicated by ‘Net Reserves’

Strategy, the world’s largest Bitcoin holder, announced on July 23, 2026, that it has introduced a new metric called “Net Reserve” to more accurately assess the value of its Bitcoin holdings. This metric calculates the “residual value” effectively attributable to common shareholders by subtracting senior claims such as preferred shares and convertible bonds (higher-level payment obligations) from the total valuation of Bitcoin held by the company plus cash.

As a specific figure, the company estimated its net reserves at approximately $36.6 billion (as of July 2026). The breakdown includes the total Bitcoin valuation of 843,775 BTC held (approximately $55.6 billion) and $3.2 billion in cash on hand, minus $22.2 billion of $15.5 billion in senior claim preferred stock and $6.8 billion of convertible bonds below the strike price. The chart below shows the correlation between the company’s disclosed asset composition and net reserves.

With the introduction of this new metric, investors now see the “true Bitcoin backing value” that remains after considering payments to creditors in the company’s complex leverage structure.

Value per Share and Revamped Valuation Multiples mNAV

Alongside the announcement of net reserves, the company also introduced a new performance metric called “Net BTC per Share.” This is calculated by dividing the calculated net reserves by the number of fully diluted shares. Based on this indicator, the value of Bitcoin per share has surged from $13 (about 44,000 satoshi) at the end of 2020 to $95 (about 143,000 satoshis) by July 2026.

This growth has reached a compound annual growth rate (CAGR) of 43%, significantly outperforming Bitcoin’s own 16% price increase during the same period. Until now, the company tended to focus on the simple number of shares held or acquisition price, but going forward, the “net value added” after deducting debt costs will become the standard for measuring management quality.

Furthermore, the calculation method for mNAV (Market NAV Multiple), an important metric comparing stock prices and the value of Bitcoin held, has also been changed. The new method uses “net Bitcoin per share” as the denominator to measure the premium relative to the actual value after accounting for debt. As of July 24, 2026, the new mNAV method has increased to 1.02 times, indicating that market prices have converged almost to the actual value of the property.

[Management & Strategy Background] Evolution of procurement structure and adaptation to accounting standards

Shift to a “digital credit” model centered on preferred equity

The main reason for Strategy’s revamp of its metrics is the dramatic shift in its fundraising strategy. In the past, the company specialized in a “flywheel strategy” that raised funds through zero-interest convertible bonds and increased Bitcoin purchases. However, as of 2026, fundraising through “digital credit” utilizing preferred shares has become mainstream.

Raising through preferred shares allows for continuous securing of capital to increase Bitcoin purchases, while also requiring shareholders to pay high dividends at an annual rate of 13%. Chaitanya Jain, Head of Investor Relations, acknowledged that as the business structure evolved from a “debt-based” to a “capital structure including preferred shares,” traditional metrics that only looked at total holdings lacked sufficient transparency.

Chairman Michael Saylor described this shift as “the Bitcoin capital market needs a new financial language,” accelerating the transformation from a mere software company to an advanced financial firm based on Bitcoin (the Bitcoin Bank Concept). The new indicator, which clearly deducts preferred shares as senior claims, is also expected to serve as a safety net to monitor whether ordinary shareholders are being disadvantaged in such complex capital structures.

Improved transparency through the introduction of the new accounting standard ASU 2023-08

Another major factor driving the revamp of financial metrics was the introduction of the new accounting standard “ASU 2023-08” established by the U.S. Financial Accounting Standards Board (FASB). Strategy adopted this standard starting January 1, 2025, transitioning to “fair value accounting,” which values cryptocurrencies at market value and directly reflects price fluctuations on the income statement.

Under the previous accounting model (cost method), impairment was only made when the price of Bitcoin fell, and if it rose, no profit could be recorded unless the price was sold. Under the new standard, simply holding the price is reflected in the financial statements. As a result, in the first quarter of 2025, Bitcoin prices fell due to an unrealized loss of about $5.9 billion, resulting in massive net losses and extremely high volatility in financial figures.

As large unrealized losses began to surface, concerns about the company’s health grew among investors. New metrics such as “net reserves” and a set of creditworthiness metrics explain that such accounting losses do not necessarily mean a company’s bankruptcy, serving as important communication tools for maintaining investor confidence.

[Market Evaluation and Risks] Credit Indicators and Future Points to Watch

Financial sustainability and credit resilience indicated by hurdle rates

With this renewal, Strategy has also added a new “credit index” to measure debt sustainability and creditworthiness. One notable factor is the “BTC Hurdle Rate,” which is estimated at about 10.8%. This shows the minimum annual price increase Bitcoin must achieve to maintain its current capital structure, and exceeding this threshold serves as the standard for creating shareholder value.

Additionally, the break-even point is set at about 3.2%, and the BTC Floor Rate is set at about minus 11%. Floor rates indicate the limit at which Bitcoin’s price can maintain its creditworthiness over the remaining period of debt, no matter how much the price falls over the year. CEO Vong Le expressed a bullish view that there are no financial concerns unless Bitcoin’s price crashes to extreme levels such as $8,000 to $10,000.

These credit indicators visualize the “safe zone” shown in the diagram below and aim to ease concerns about a “death spiral” caused by leverage—a chain reaction where stock price declines lead to Bitcoin sell-offs. Going forward, investors will be able to quantitatively assess the company’s default risk and value impairment by comparing these rates to Bitcoin’s actual market price.

Operation of Bitcoin Sell Quotas and the Outlook for Next Financial Results

The biggest future focus will be the operation of the company’s newly established “Bitcoin Sell Limit.” In late June 2026, the company for the first time accepted a framework allowing the sale of up to $1.25 billion worth of Bitcoin. This marks a major strategic shift from Chairman Saylor’s long-stated policy of “Never sell (HODL),” and is a measure to flexibly carry out dividend payments on preferred stock, share buybacks, and cash reserves.

As of July 2026, instead of selling Bitcoin, the company is securing cash by issuing additional common shares, maintaining a holding of over 840,000 BTC, but whether this sale quota will actually be exercised has become a key concern in the market. Since spot Bitcoin sales could put selling pressure on the market, analysts such as JP Morgan are closely monitoring the situation.

The company plans to announce its second-quarter earnings on July 30, 2026, with the latest financial results based on new metrics expected. Even during the Bitcoin price downturn, is the new indicator of “net Bitcoin per share” continuing to increase, and is the burden of preferred stock dividends putting financial pressure on the finances? Whether the strategy aims for a ‘Bitcoin bank’ is truly sustainable is once again being questioned by the market.

Reference Page

• 【Strategy Investor Relations – Metrics Definitions】https://www.microstrategy.com/en/investor-relations/financial-information/metrics

• 【SEC Filings – Form 8-K (April 7, 2025)】https://www.sec.gov/ix?doc=/Archives/edgar/data/1050446/000105044625000045/mstr-20250407.htm

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