08/22 update below. This post was originally published on August 21
Bitcoin has plummeted since hitting an all-time high of $124,000 per bitcoin earlier this month, dropping around 10% as a controversial new memecoin hits the market.
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The bitcoin price surged though the first half of 2025, doubling in price as U.S. president Donald Trump’s crypto support and Wall Street’s long-awaited adoption provide twin tail winds (while Elon Musk has quietly breaking his crypto silence).
Now, as Kanye West finally drops a long-awaited crypto bombshell, serious warnings over bitcoin treasury pioneer Strategy’s new fundraising rules have added to a 25% stock sell off that some fear could cause a “spiral of doom” for the company and the bitcoin price.
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Strategy founder Michael Saylor has inspired a flood of copycat bitcoin acquisition companies, helping the bitcoin price to surge to a record high.
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This week, Strategy, led by founder Michael Saylor, loosened its long-held rules on when it will dilute shareholders to buy even more bitcoin, with the company already holding almost 630,000 bitcoin worth $70 billion.
The announcement has been criticized by some analysts, who at worst fear it could trigger a “doom loop” for the company.
“Potential spiral of doom looming for Strategy,” EasyA cofounder and former Goldman Sachs analyst Dom Kwok posted to X, warning it could lead to Strategy being forced to sell its bitcoin to pay interest as its shares slowly decline in value.
08/22 update: The bitcoin price and wider crypto market is on tenterhooks ahead of Federal Reserve chair Jerome Powell’s final Jackson Hole Economic Symposium speech, with traders wary he’ll maintain his commitment to higher interest rates despite president Donald Trump’s public campaign for the Fed to cut.
“There is much attention to any hint from the Fed, particularly this Friday’s speech at the Jackson Hole symposium in Wyoming … markets will be looking to the Fed speech for direction on the future of monetary policy,” Nic Puckrin, crypto analyst, investor, and founder of Coin Bureau, said in an emailed note.
“Bitcoin’s retracement is not indicative of severe damage, but it is a sign of a timeout while investors rebalance risk. The broader crypto ecosystem, and especially the altcoins, are seeing the same profit-taking. Shorts are still high, and traders are holding out for greater clarity before taking additional positions. The combination of macro uncertainty, geopolitical tensions, and technical selling is keeping the market range-bound in the near term.”
Powell, whose term as chair ends next year when he’s expected to be replaced by a dovish Trump devotee, holds the bitcoin, crypto and technology stocks in the palm of his hand today, as analysts prepare to scrutinize his words and tone for signs of where interest rates will go for the rest of the year.
“The event risk is high ahead of Fed chair Powell’s remarks at Jackson Hole, and this week, the traditional markets appear to be cautious and experienced some losses earlier in the week before recovering,” James Toledano, chief operating officer at Unity Wallet, said in emailed comments.
“It is important to note that prices in the U.S. appear to be rising at a very fast pace, while total inflation remains steady, core inflation rose by 3.1%. This could scupper any chances of a Fed rate cut–despite the pressure on Powell from president Trump. Right now, the markets appear to be treating the volatility as a healthy correction rather than a trend reversal, but many are bracing for choppier waters. All-in-all, I think we should expect continued volatility—positioning may remain defensive through the speech, followed by either renewed direction or status quo afterwards.”
Strategy’s share price, which has outpaced bitcoin over the last year as a dividend-paying alternative to holding bitcoin directly, has dropped 25% since hitting an all-time high in mid-July, falling alongside bitcoin but pushed lower due to the flood of rival, copycat bitcoin-buying companies that have sprung up in its wake.
Since beginning to buy bitcoin in 2020, Saylor has transformed Strategy into a bitcoin corporate giant, holding 3% of all the 21 million bitcoin that will ever exist, while its closest rival holds just $4 billion of bitcoin.
Strategy issued new “equity guidance” this week that said the company will issue stock at a lower bitcoin market-to-net asset value multiples (mNav) than was promised as recently as July.
Strategy had previously said it would not issue shares under 2.5x mNav, which calculates its market capitalisation to the value of its bitcoin holdings. If its mNav is above 1, it means Strategy stock buyers are paying a premium for bitcoin exposure, while if it’s below 1 means the stock is worth less than the bitcoin the company owns.
Strategy’s mNav is currently 1.3, according to bitcointreasuies.net, with some of the new bitcoin treasury companies such as Twenty One Capital and Nakamoto trading at under an mNav of 1.
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The bitcoin price has rocketed higher over the last year, helped by Michael Saylor’s Strategy and other copycat bitcoin-buying companies.
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“Strategy today announced an update to its MSTR Equity ATM Guidance to provide greater flexibility in executing our capital markets strategy,” Saylor posted to X.
Under the new rules, Strategy can tap equity markets at thinner premiums, giving it a broader range of options and even allowing it to issue credit to repurchase shares if its stock falls under an mNav of 1.
However, not everyone is bearish on Strategy. Earlier this month, analysts with Strive, an asset manager cofounded by U.S. politician Vivek Ramaswamy, predicted Strategy could be included in the S&P 500 as soon as September.
If Strategy is included in the index, it would “instantly give tens of millions of Americans bitcoin exposure through their pension funds, 401(k)s and brokerage accounts,” Strive analysts wrote, adding it would unleash “the ‘Uberization’ of bitcoin—integrating digital assets so deeply into American economic life that attempting to ban them becomes nearly impossible.”
