Has the MSTR Ballistic Acceleration Model Broken?
Bitcoin just reached new all-time highs, but MSTR didn’t follow.
Some are asking if the Ballistic Acceleration Model is broken.
TLDR: The model isn’t broken, but there are some other important factors to consider.
Quick Take: The Model Works—But the Game Has Changed
· Velocity of BTC stacking is now king. MSTR’s current lag is all about the change in BTC Yield.
· Days to Cover mNAV helps us understand the change in velocity of BTC Yield across time.
· Change in BTC Yield (acceleration) will impact price.
· Strategy’s pivot to preferred stock is a smart long game to keep BTC Yield high by accessing bigger pools of capital.
The Ballistic Acceleration Model, Explained Simply
Strategy is built on Bitcoin.
The relationship between Bitcoin’s price and MSTR’s share price is often referred to as the multiple of net asset value (mNAV) — a simple way to track how much BTC per share the market is pricing in at a certain Bitcoin price.
However, the ballistic model is based on the relationship between BTC and MSTR in the log-log space. Plotting a 2nd-order polynomial through this data gives us a super high R2 of 0.98, meaning we have an excellent model fit.
As more data becomes available, the strength of this relationship only continues to increase. However, the predictions have decreased with decreasing BTC Yield since November.
The Fair Value Model: Why MSTR Still Has Room to Run
We’ve also previously discussed our Fair Value Model, which considers the relationship between BTC value per share and MSTR. Again, it’s pretty robust over a long period of time, with an R2 of 0.97.
This relationship allows us to calculate the ‘fair value’ based on their current BTC value per share. As you can see in the chart below, MSTR has been at the bottom of the fair value range for the past few months, but this is not the first time MSTR has been below the fair value. Saylor has a way of pulling a new rabbit out of his hat, again and again.
Stack Fast or Fall Behind: The Race for BTC Yield
Unfortunately, neither of these models considers time.
Investors pay a premium for the companies that can stack BTC the fastest. If the rate of change speeds up (acceleration), investors will pay more (and vice versa). That’s why MSTR’s #1 KPI is BTC Yield.
The chart below shows the current BTC holdings of some of the leverage equities, large and small.
To some, plotting the smallest and largest BTC leveraged equities on the same chart seems ridiculous.
But the log scale is important.
If they can keep up with the linear growth on the log scale, they are achieving exponential growth.
The company with the fastest growth will command a higher mNAV premium and, hence, be able to stack bitcoin faster. The cycle rapidly continues.
But if they can’t keep up their steep exponential growth, investors will move on to the next fastest horse.
Time Is Money: Days to Cover mNAV is the New Hurdle Rate
That’s why the Days to Cover mNAV metric is so interesting: it considers time.
Days to Cover mNAV is how long it will take to pay off the premium over and above the value of the company's bitcoin.
As shown in the chart below, back in October, Strategy's Days to Cover mNAV was around 1800. Thanks to the ATM and convertible debt they rolled out in the 21/21 plan, they bought this down to 175 days.
However, thanks to the covered call sellers trading the volatility, volatility dropped, making it harder for MSTR to issue convertible debt at attractive terms.
The ATM alone hasn’t enabled them to buy bitcoin fast enough to justify the high mNAV they had in the past. Importantly, though, without the ATM, MSTR would be dead in the water with no BTC Yield. So they continue to use the ATM whenever the mNAV is above 2.0.
Meanwhile, other companies have followed the Strategy playbook with innovative ways to raise capital to buy bitcoin. MetaPlanet has grown quickly with a captive Japanese market in a failing economy with no alternative investment options. Meanwhile, The Blockchain group is growing from a small base in France, using bitcoin-denominated loans. Both have a lower Days to Cover mNAV and can hence command a higher premium, and their share price has skyrocketed!
BTC Yield Is King
BTC Yield has been Strategy’s #1 KPI for a while, and they have underpromised and over-delivered, achieving a 75% last year. In 2025, they set a target of 25% and have achieved a BTC Yield of 16% to date.
Our analysis suggests that, if they lever up through the rest of 2025, they could exceed 75%, giving them a BTC stack of 700-900k! The chart below shows what this would look like in terms of BTC per share growth across the rest of 2025, with a 0.16% BTC Yield per day.
While not as fast as what they managed in November, 0.16% per day (126% compounding) it’s still pretty damn impressive! But it's not quite as impressive as MetaPlanets' 0.8% per day or ALTBG's 1.6%!
Unfortunately, keeping the BTC Yield high becomes harder when the denominator (BTC stack) is so high! You have to go fishing in larger and larger pools of capital (like the bond market).
The New Strategy: Why Preferred Stock Might Be the Masterstroke
Rather than hammering the convertible bonds and taking on more debt, Strategy has recently focused on the preferred stocks (STRK and STRF). This potentially unlocks the $318 trillion bond market, which could flow into the preferred stocks with much better returns than normal bonds (i.e. 8 or 10% vs 4-5% for bonds). However, to be seen as safe, they must keep an eye on leverage (currently low, at 16%).
Strategy also appears likely to make it into the S&P500 before too long, which will see a massive amount of passive inflows to lift the share price and fuel a higher BTC Yield. Additionally, some well-timed convertible bonds could rocket them back above the fair value and the ballistic trajectory.
But bitcoin is a dog-eat-dog world. Survival of the fittest. And some of Saylor’s puppies he’s mentored and inspired are growing up! But at the same time, spreading the sound money gospel is a clever play because having multiple bitcoin treasury companies trying to stack BTC as fast as possible places a continual buy on BTC at just about any price. A rising bitcoin price lifts all boats.
What Does the Future Hold for Strategy?
Going forward, Strategy might not grow as fast as MetaPlanet and ALTBG in the short term; however, they will likely still grow much faster than any other US-based company, which isn’t so bad, especially for a company with a market cap of greater than $100b!
Meanwhile, other investors will take their chances with smaller companies that can achieve more torque in the race to acquire as much as possible in the BTC gold rush era.