Strategy Inc: MicroStrategy's Bitcoin Treasury - A Blue Ocean Shift or a Speculative Bet?

This case examines Strategy Inc.'s (formerly MicroStrategy) strategic shift from an enterprise analytics software firm into the world’s first and largest publicly traded Bitcoin treasury company. CEO Michael Saylor challenged the fundamental treasury assumption that cash and cash equivalents were a safe store of value and instead adopted Bitcoin as the company's primary treasury reserve asset, arguing that fiat currency was being steadily debased by endless money printing and near-zero interest rates, while Bitcoin’s scarcity made it a better store of value and a hedge against inflation and debasement. The case traces Saylor’s decision to shift Strategy Inc.’s treasury from fiat to Bitcoin, how he convinced the board and the investor community to buy in, and the challenges faced in making the shift. It discusses how the strategy was stress-tested multiple times and scaled by raising capital through debt and equity to amass nearly 3% of the world's Bitcoin supply and deliver high returns, with the stock price rising almost 2,500% within four years. The case reveals some of the current challenges facing the company and raises the question: Did Saylor create a blue ocean in corporate treasury management—unlocking a new market space delivering superior returns on treasury reserves at a lower cost of capital—or, as the mainstream financial press first claimed, was he steering Strategy Inc. into dangerous waters? Was this a "trillion-dollar pivot" as Forbes called it, or a “ticking time bomb” as skeptics warned? More simply put, is investment in Bitcoin the reckless bet it is often portrayed to be, or is the greater risk the red ocean practice of parking corporate reserves in fiat currencies that steadily erode in value?

• Demonstrate how unquestioned industry assumptions about fiat currency as a safe and dependable store of value blinds companies to the risks associated with fiat currency debasement, and how Strategy Inc. challenged this assumption, converting its fiat reserves into Bitcoin and creating an entirely new market space for treasury management and risk-managed Bitcoin exposure.
• Analyze how and if Strategy Inc.’s strategic shift allows it to break the value-cost tradeoff, delivering exceptional Bitcoin upside with limited downside risk for investors, while keeping its cost of capital and risk of default extremely low.
• Analyze how Strategy Inc. transformed corporate treasury from passive capital preservation to an active growth engine with its fiat-to-Bitcoin carry trade strategy.
• Evaluate how Saylor’s communication approach to the board and the investor community was critical to the success of the shift in strategy, and how the practice of fair process builds internal and external stakeholder trust and buy-in when making a strategic shift.
• Understand the challenges Strategy Inc. faced in executing the strategic shift, and how the firm systematically derisked the strategy. How it embraced Bitcoin's volatility, rather than viewing it as a risk to minimize, turning price fluctuations into a financing advantage that allowed it to issue debt and equity at favorable terms to accumulate Bitcoin at scale.
• Examine how Strategy Inc.’s multi-layered capital stack converts diverse pools of noncustomers with varying risk, yield, and volatility preferences into customers of the new market space.