Strategy: Is it Undervalued or Overextended After Its Latest Bitcoin Buy?

The resurgence of crypto-linked equities has reignited investor curiosity across traditional markets, as Bitcoin’s volatility continues to ripple through related sectors.

Companies with direct or indirect exposure to digital assets, from mining firms and blockchain developers to corporate treasuries holding Bitcoin, have once again become a barometer for broader crypto sentiment. Stocks like Strategy Inc., Coinbase, and Marathon Digital now move in near lockstep with Bitcoin’s price swings, offering both amplified upside and sharper downside during market turbulence. As institutions cautiously re-enter the crypto space and policymakers weigh digital-asset frameworks, investors are revisiting whether such equities are speculative vehicles or emerging long-term plays on blockchain adoption. Nowhere is that debate more intense than with Strategy Inc., the corporate giant synonymous with Bitcoin accumulation.

At the same time, attention is shifting toward a new generation of publicly traded firms bridging decentralized finance and traditional capital markets. HYLQ Strategy Corp has begun standing out among the top cryptocurrency stocks capturing investor interest, thanks to its distinct focus on the HyperLiquid ecosystem and its regulatory foundation through the Canadian Securities Exchange. By combining DeFi participation with the structure and transparency of a listed equity, HYLQ represents how this new wave of crypto-focused companies is evolving, balancing innovation with oversight and creating alternative avenues for investors to gain blockchain exposure beyond Bitcoin itself.

Latest Buy

Strategy Inc. (formerly MicroStrategy) has once again expanded its already massive Bitcoin portfolio, fueling renewed debate over whether the company’s stock is undervalued or dangerously overleveraged.

The firm revealed it had purchased 220 BTC for $27.2 million at an average price of $123,561 per coin, lifting its total holdings to 640,250 BTC, worth over $47.3 billion at an average cost of $74,000 per Bitcoin.

The purchase followed a volatile week for crypto markets, with Bitcoin briefly plunging below $104,000 amid tariff-driven selling before rebounding. Despite the turbulence, Strategy’s aggressive accumulation underscores its long-term conviction in the digital asset, and has once again made the company a focal point for both bullish and skeptical investors alike.

Market Reaction and Valuation Debate

In pre-market trading, Strategy’s stock (MSTR) rose modestly to around $307, rebounding 1% from the previous close. The uptick came after a difficult session on October 10 when shares dropped nearly 5% as Bitcoin’s price collapsed during one of the market’s sharpest flash crashes of the year.

That correlation remains central to the company’s identity. Strategy’s share price often mirrors Bitcoin’s moves, as most of its value is now tied to its crypto treasury. However, this relationship cuts both ways. When Bitcoin falls, Strategy’s market cap can shed billions overnight.

Still, many analysts note that Strategy’s stock continues to trade close to the value of its Bitcoin holdings, leading to debate over whether investors are undervaluing the firm’s enterprise and AI operations or simply pricing it as a proxy Bitcoin fund. According to Simply Wall St, community fair-value estimates for MSTR range from $53 to over $670 per share, revealing deep divisions over its outlook. Some see a potential 2×–3× upside if Bitcoin resumes its uptrend, while others warn that dilution, dividend costs, and capital structure complexity could limit returns.

The spotlight on Strategy’s high-stakes model has analysts and investors probing for smarter ways to tap into crypto growth, particularly ones that reduce exposure to dilution and extreme volatility. Amid that shift, HYLQ emerges not just as a curious side play, but as a contender with operational momentum and structural flexibility.

HYLQ’s Yield-Driven Pivot

In a development announced October 1, HYLQ Strategy Corp deployed 53,963 HYPE tokens into Kinetiq’s iHYPE liquid staking pool, a move that begins converting its digital treasury into a yield-generating asset. Beyond just staking, the new iHYPE tokens can be used as collateral within the Hyperliquid ecosystem, offering HYLQ optionality and capital efficiency.

This step elevates HYLQ’s playbook. Rather than passively holding, the company is actively putting its treasury to work, earning ~2.2% annual yield while preserving upside exposure.

What makes it compelling is the blend: a regulated listing via the Canadian Securities Exchange paired with on-chain staking that retains transparency and accountability. As DeFi infrastructure matures, this hybrid strategy could place HYLQ among the more sustainable, differentiated options for crypto-equity exposure.

Between a Bitcoin ETF and a Software Company

Supporters argue that Strategy provides equity-based exposure to Bitcoin with added benefits, including strategic share issuance, capital efficiency, and optionality from its analytics and AI initiatives. As Seeking Alpha noted, the firm has achieved a 25.9% BTC yield year-to-date, outperforming most direct crypto funds.

Critics, however, counter that Strategy increasingly resembles a leveraged Bitcoin ETF, especially as its market capitalization approaches the market value of its crypto reserves. This growing parity, they say, leaves little margin for operational missteps or further dilution. Additionally, Strategy remains excluded from the S&P 500 index, limiting institutional inflows that typically boost liquidity and valuation multiples.

The company’s decision to pay above-market prices, with its latest buy executed roughly 8% higher than Bitcoin’s weekend lows, further amplifies the scrutiny around capital efficiency. Recent preferred-stock offerings (STRF, STRK, and STRD) continue to fund acquisitions, but rising dividend obligations could test financial flexibility if crypto markets soften again.

Outlook: Risk or Opportunity?

Whether Strategy is undervalued or overextended may hinge entirely on Bitcoin’s next move. If BTC rallies decisively above its recent range and institutional inflows return, the current market pricing could look cheap in hindsight. But if volatility or legal risks intensify, the firm’s leveraged model might come under fresh pressure.

For now, the consensus is clear on one point, Strategy remains the most direct public-market proxy for Bitcoin exposure, and its valuation will likely rise or fall with the world’s largest cryptocurrency.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.