After several months of pressure, shares of Bitcoin treasury Strategy (NASDAQ:MSTR) have rallied by over 10 percent in recent days, driven by a similar recovery in the price of Bitcoin itself. Strategy has been extremely volatile over the past 12 months, ranging from a 52-week low of $149.75 to a high of $457.22. What does 2026 hold for Strategy, and how high will MSTR stock go now that it’s starting to bounce back
Where Is Bitcoin Heading in 2026?
Given that its value is almost entirely tied to the price of Bitcoin, the single biggest factor weighing on the price movements of MSTR is what Bitcoin does this year. While Bitcoin and cryptocurrencies are always volatile, the range of price predictions from industry experts this year is especially broad. Using these as a gauge, Bitcoin could go anywhere from about $75,000 to about $225,000 this year, resulting in anything from further losses in MSTR to significant gains on the stock.
This extreme volatility points to one of the key characteristics of Bitcoin, namely its lack of intrinsic value. With prices driven almost exclusively by market dynamics, Bitcoin is a deeply speculative investment that isn’t directly tied to value derived from cash flows. In recent years, however, Bitcoin has generally moved in concert with the stock market.
With that said, there do seem to be some signs of a renewed Bitcoin bull market shaping up. Early 2026 has seen significant inflows into spot Bitcoin ETFs, suggesting that investors are trying to get in while BTC prices are still somewhat depressed. ETFs have been a consistent source of demand for Bitcoin since the US government allowed them to begin trading, and buying activity through these ETFs has produced significant upward pressure on the price of Bitcoin. If a new period of heavy ETF buying activity emerges, the effect on the price of Bitcoin and, by extension, MSTR, could be deeply positive.
To get a sense of just how highly correlated the prices of MSTR and BTC are, it’s useful to look at their trailing 30-day returns. In the last month, shares of MSTR are up by about 9.8 percent. Bitcoin, meanwhile, is up about 9.6 percent.
MSTR Has A Long Way To Go?
At the moment, analysts are deeply bullish on MSTR’s prospects. The consensus price target for the stock is $473.62, which would imply an upside of over 170 percent from the most recent price of $173.71. Even the lowest price target standing at the moment is $229, representing an upside of more than 30 percent.
It’s also worth noting that the significant fall in Strategy’s share prices has eliminated one of its previous valuation problems, namely a huge gap between the market cap of the business and the amount of Bitcoin it held. Today, MSTR has a market cap of $55.5 billion and a Bitcoin reserve currently valued at over $65 billion.
Heavy Risks of MSTR But Are They Worth It?
While Strategy may look appealing at its current valuation, there are legitimate reasons for the selloff that has brought the stock to its current lows. Beyond just falling Bitcoin prices, Strategy’s habit of using debt to buy Bitcoin has left it in what could be a rather risky position. While the value of the Bitcoin it holds is significant, Strategy carries over $8 billion in debt. If the price of Bitcoin collapsed, as has happened on more than one occasion throughout its history, Strategy could find itself unable to meet the debt obligations it has taken on.
Strategy has also heavily diluted its own shares to raise capital for Bitcoin purchases, a fact that has worked against existing investors. Since December of 2024, the number of outstanding MSTR shares has skyrocketed from about 220 million to well over 280 million. If management keeps issuing new shares at such a rapid pace, investors could see the value of their shares eroded while waiting on a Bitcoin recovery.
The last few months have also illustrated how much Strategy can struggle when Bitcoin prices deteriorate. Beyond simply being a treasury for Bitcoin, Strategy has offered various forms of preferred shares that pay large cash dividends. These shares brought in more capital for the purchase of Bitcoin, but also increased Strategy’s need for cash. With the price of Bitcoin down, the preferred shares are still required to pay their dividends, creating the potential for insolvency if the price of BTC dips low enough.
How High Will MSTR Go?
At the moment, the direction of MSTR shares seems to depend almost entirely on whether or not Bitcoin can stage a significant recovery. Rising BTC prices could send Strategy substantially higher, especially if Bitcoin moves beyond the highs it reached in October of last year.
Even though such an increase in share prices could be on the horizon if Bitcoin recovers, MSTR still looks very risky. To begin with, its value being heavily tied to the price movements of an asset that lacks intrinsic value as traditionally understood by investors makes it highly volatile, as the events of the past several months have shown. Concerns about the debt and share issues used to finance the purchase of Bitcoin could also make MSTR less appealing than Bitcoin ETFs for investors who are looking for cryptocurrency exposure.
Ultimately, it seems likely that a rally in Bitcoin prices this year could carry MSTR significantly higher. What doesn’t seem likely, however, is that Strategy will regain the premium investors once paid for the stock when compared to the value of its Bitcoin holdings. This seems to leave the amount of upside that can be found in MSTR shares almost entirely tied to how much Bitcoin rises in the coming year.
Unfortunately, as we’ve already seen, there’s no unified view on how much upside Bitcoin could see this year. While the cryptocurrency has shown early signs of recovery so far this year, it’s still too early to tell if it’s at the outset of a major new bull market.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.