u/HSuke

A quick analysis of slide 52 of the Q2 2026 earnings:

• 99.4% of STRC investor accounts are Retail
• Between Q1 and Q2, the # of institutional STRC investors grew by 37% while the # of retail investors grew by 73%.

Mar 17, 2026:

• Institutional investors: $1.1B value, $1.7M average value per account => 647 institutional investors
• Retails investors: $3.9B value, $44k average value per account => 89k retail investors
• 147x more retail investors than institutional investors

Mar 17, 2026:

• Institutional investors: $3.1B value, $3.5M average value per account => 886 institutional investors
• Retails investors: $7.4B value, $48k average value per account => 154k retail investors
• 174x more retail investors than institutional investors

This analysis is based on Strategy's "New & Updated Metrics" presentation released on July 23, 2026. I've also deciphered a lot of the background financial terminology that was left out of the slides.

####TL;DR: MicroStrategy keeps changing its metrics to fit new narratives:

In summary, a lot of MicroStrategy/Strategy's misleading older metrics for mNAV and BPS were no longer looking positive after diluting/selling MSTR to increase cash reserves or execute STRC buybacks. So they've needed to invent new terminology to help bridge that gap and account for increasing cash reserves.

While I believe the new metrics are more accurate (and more similar to CEBE metrics), I do not appreciate how Microstrategy has historically ignored widespread criticism over their older misleading metrics when those old metrics were benefitting their marketing by painting their performance as more positive than they actually were. Only now are they acknowleding the criticism over metrics when it benefits them.

This isn't the first time MicroStrategy has updated its metrics. Similar to how the rainbow chart evolves every time it loses its narrative, MicroStrategy's mNAV has evolved from Basic mNAV to Diluted mNAV to Enterprise mNAV to the "new" mNAV and new Net BPS.

####What's the difference between In-The-Money and Out-of-The-Money?

Microstrategy's puttable debt can be ITM (converts to shares) or OTM (redeems for cash). Puttable means that the debt holders have the choice of redeeming for cash OR converting to shares.

• In the Money (ITM): Converts to shares. The current market price of the common stock is higher than the preset conversion price. Converting the security into common shares is worth more than holding it as a fixed-income asset.
• Out of the Money (OTM): Redeems for cash. The current market price of the common stock is lower than the profitable conversion price
• All convertibles and STRK are currently OTM because MSTR price is too low ($97) for them to convert profitably ($150-$1000). This is really bad for MicroStrategy because those convertibles can be redeemed at their high conversion values for cash on their 2027-2029 put dates.

####New Net Metrics

The old metrics were replaced by ones that include the USDC reserve but subtract debt.

Created because the plain BPS metric was no longer increasing when selling MSTR to increase the reserves (i.e. diluting MSTR shares).

• Reserve ($): BTC Reserve + USD Reserve
• Fully Diluted Shares Outstanding (FDSO): Basic shares + Options + RSUs/PSUs + In-The-Money Debt & Pref
• Assumed Diluted Shares Outstanding (ADSO): Basic shares + Options + RSUs/PSUs + All Debt & Pref
• Net Reserve ($): BTC Reserve + USD Reserves - (OTM Debt and Prefs)
• Net BTC (₿): BTC + Net Reserves / Bitcoin Price
• Net BTC Per Share (Sats): Net BTC (₿) in sats / Fully Diluted Shares Outstanding
• Net BTC Per Share ($): Net BPS (sats) × Bitcoin Price

Net BPS (in Sats and $) are the 2 big ones they're now using for their KPIs (Key Performance Indicators)

Strategy expects a ~50% performance increase (i.e. Amplification) by using Net BPS instead of plain BPS as a metric. I honestly don't know why the Amplification metric exists other than to make numbers look good.

####Updated Metrics

• mNAV: MSTR price / Net BPS = MSTR FSDO market cap / Net Reserves
• Amplification: BTC Reserve / Net Reserve

The older Enterprise mNAV was calculated as: Enterprise Value / BTC Reserve

This new mNAV is a pain to calculate since it keeps changing depending on whether the convertible debt is ITM or OTM. This mNAV rises faster than Enterprise mNAV the higher it gets from 1.0. (e.g. Currently, Ent mNAV is 1.02 while new mNAV is 1.05.)

mNAV still acts fine as a craziness index. mNAV under 1 means that everything is backed and that investors are sane. mNAV over 2-3 means that investors are getting overly-bullish. ####Other new metrics:

• Duration (Yrs): Reserve / Annual Interest and Dividend Obligations, expressed in years
• BTC Hurdle ARR: At BTC growth rate above the Hurdle ARR (currently 10.8%), credit can fund itself indefinitely through BTC sales. Below this, MSTR is expected to underperform BTC.
• BTC Breakeven ARR: The BTC growth rate (currently +3.2%) above which BTC sales can cover preferred dividends. Below the Breakeven ARR, BTC growth can no longer pay for dividends on its own.
• BTC Floor ARR: Below the Floor ARR (currently -11.8%), refinancing and restructuring credit may be needed. It's really bad for BTC growth to go below the Floor ARR.

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TL;DR: Microstrategy has finally deprecated its old misleading metrics after they shed light on bad performance numbers. Created new metrics (that better account for reserves and debt) to help numbers look better.

I'll be back next year when newer metrics are invented again.

Section 530A "Trump" accounts have fewer tax-benefits (unless converted to Roth IRA) in most situations compared to normal taxable accounts.

They're somewhat similar to really, really shitty Traditional IRA accounts where even the initial deposits are already taxed. So you don't even get the initial tax deductible benefit. (And even the donations are taxable later on.)

####Trump accounts are far worse tax-wise than even normal taxable accounts for most situations because:

1. Normal taxable account gains held for 18 years are taxed at lower long-term capital gains rates that start at a 0% tax rate for the first $49.5k
2. Trump accounts gains are taxed at higher ordinary income tax rates, and there are early withdrawal penalties

####There are only 2 situations where it's more beneficial to have a Trump account:

1. Roth IRA conversion

The accounts can be converted to Roth IRA after age 18, so it's a loophole that allows for larger Roth IRA contributions. But if your kid doesn't convert the account to Roth IRA, the account is both less tax-beneficial than a normal taxable account, AND it's stuck as a retirement account with early-withdrawal penalties.

2. You only make short-term trades

The benefits of tax-deference add up over time. If you're the type who only buys and trades short-term, you won't benefit from lower LTCG tax rates. This is also assuming you don't want your kid touching the money until they retire, so they won't incur any early-withdrawal penalties.

Edit: Yes, also the free $1k for kids born 2025-2028. I meant to answer the question of whether it's beneficial to contribute further after the $1k.

As of this week, both the Bitcoin Power Law chart and the Bitcoin Rainbow chart (now on its 5th version) have broken through the bottom. Both of them have always grossly overestimated BTC price and underestimated the diminishing returns of each cycle.

####Bitcoin cycles have diminishing returns

• Cycle 2: 50x gain
• Cycle 3: 20x gain
• Cycle 4: 3x gain
• Cycle 5 (just ended): 2x gain (1.7x inflation-adjusted)

####Returns converted to 4-year CAGR:

• Cycle 2: 170%
• Cycle 3: 110%
• Cycle 4: 32%
• Cycle 5 (just ended): 19% (14% inflation-adjusted)

The current Cycle 6 will likely only have 1.4x to 1.6x, which is roughly 9-12% CAGR. Beyond that, BTC price returns are no better than S&P 500 returns, but with much more risk.

Within a couple of cycles, not only will the S&P 500 have less risk than holding BTC, but the S&P 500 will also have higher returns than holding BTC. A lot of crypto investors are going to leave. So if you think THIS bear market sucks, good luck surviving the next 2 cycles. It's going to be worse.

Saylor designed STRC expecting 30% CAGR for Bitcoin. I hope he's ready for far, far lower returns.

(There is one silver-lining: This diminishing returns analysis is based on cycle highs. The cycle lows for this cycle are still around 30% CAGR as of the start of June 2026, but that's likely because the cycle isn't over yet and we haven't hit the bottom. If BTC falls to $30-40k before the end of this cycle, then the returns will be just as bad as the cycle high predictions.)

Let's talk about the elephant in the room:

####Bitcoin cycles have diminishing returns

• Cycle 2: 50x gain
• Cycle 3: 20x gain
• Cycle 4: 3x gain
• Cycle 5: 2x gain (1.7x inflation-adjusted)

Anyone who has looked at the Bitcoin Power Law charts or the Bitcoin Rainbow chart (4th version now) has probably noticed that they have always overestimated BTC price. BTC price has dropped below the Rainbow chart AGAIN. Power Law upper estimate is off by 3x, and the lower estimate is about to be breached. They always overestimate the diminishing returns of each cycle.

####Returns converted to 4-year CAGR:

• Cycle 2: 170%
• Cycle 3: 110%
• Cycle 4: 32%
• Cycle 5: 19% (14% inflation-adjusted)

I don't know why Saylor is expecting 30% CAGR returns in the future. We only had 19% nominal returns the previous cycle, and it's only going to get worse due to diminishing returns.

If the next cycle only has 1.5x gains, that's a 11% CAGR. Beyond that, BTC price returns are no better than S&P 500 returns, but with much more risk. Thus I believe we only have a few more good cycles left.

I'm just curious about how you feeling about STRC after the recent drop.

• Are you happy with how the product is doing?
• What's your goal, and how long do you plan to hold?
• Are you planning to buy more or sell?

I've manually summarized the 30-min interview:

(Most of these are Jeff's opinions, but I've also added some relevant background info)

There are many issues with Microstrategy's recent decisions:

• They used up most of their cash reserves to pay back convertible debt that didn't need to be paid back this early, and now they only have 6 months of dividends worth of cash. Institutions and STRC holders are spooked.
• They didn't accomplish anything useful by selling an insignificant bit of Bitcoin. All it did was spook the markets and persuade them that the next larger selling would do even more damage.
• Bitcoin price is down, so selling further BTC would return even less.
• STRC is so far below par that there probably won't be STRC ATM this month. (Ex-div is only 1.5 weeks away.)
• There are insufficient cash reserves. MSTR holders are scared that there will be further MSTR selling. BTC holders are scared that there will be more BTC selling. The selling is not done yet.

What Microstrategy should have done:

The fear of the needle is often far scarier than getting the shot. The actual shot is over before they know it, and it's easy to move on.

According to Jeff of Arca, Microstrategy should have ripped the bandaid off and sold $2B of BTC, accomplished something useful by showing that they are done with the selling for the next year or so. With that money, they can replenish the cash reserves or pay the next year of STRC dividends. Over time, STRC ATM can continue and replenish the BTC. The markets will be spooked initially, but once they realize the selling is done, they can move on and climb back. And STRC ATM will replenish BTC.

Instead, Microstrategy spooked the markets but didn't accomplish anything useful. And now they still have STRC dividends to pay for the rest of the year while there's almost no cash reserves remaining. We're probably not going to see STRC ATM for the next 1.5 months. And the markets are still preparing for the next inevitable BTC sale. This is the worst outcome.

Microstrategy just paid off $1.5B of their $8.2B convertible debt, and they did it by spending $1.38 of $2.25B (60%) of their remaining cash reserves. The good news for Bitcoiners is that they did it without selling BTC. The bad news for Bitcoiners is that they now only have $0.87B of cash left, and might be forced to sell BTC in the near future at less opportune timing in a bear market. Until they replenish the reserve, this cash reserve now provides only 6 months of STRC dividends (it was 1.5 years before).