MSTR's share price faces a prolonged period of decline.

Shares of Strategy (MSTR), the publicly traded company with the largest Bitcoin (BTC) holdings, have fallen below the net asset value of its cryptocurrency holdings.

In the last month, the stock has lost 26% and has fallen 43% over the last six months. It is currently trading around $224, compared to $316 just a month ago, as shown in the chart.

This correction has been more pronounced than that of Bitcoin itself, which reached its all-time high above $126,000 in late October.

As a result, Strategy's basic net asset value (mNAV) multiple has fallen to 0.97. This indicator measures the relationship between the company's market capitalization and the market value of its Bitcoin holdings (using the basic outstanding shares, without future dilution from convertibles). An mNAV below 1 means that the market values ​​the entire company at less than its net Bitcoin holdings.

From a bullish perspective, the fact that the shares are trading at a discount to the value of its BTC can be seen as an attractive entry opportunity for investors who maintain long-term conviction in the thesis and desire exposure to Bitcoin.

However, from a more skeptical perspective, the drop in mNAV below 1 could indicate that investors are beginning to question the sustainability of the strategy. If the company loses its ability to continue raising capital under favorable conditions, the discount could become structural and deepen over time.

"The worst may be yet to come," says analyst Daniel Muvdi, because if BTC corrects below $75,000, which is Strategy's average purchase value, "the decline could intensify, forcing them to sell BTC to cover expenses, which could put much more than just MSTR at risk."

Despite the market weakness, Strategy has not halted its accumulation strategy. Its last known purchase was 487 BTC for approximately $50 million, although the pace of acquisitions has slowed considerably compared to previous periods.