Strategy: Don’t Bet On A U.S. Dollar Crisis, As It’s Highly Unlikely (Upgrade)

Summary Strategy stock is a high-beta investment that would thrive in macroeconomic chaos. Yet, in the structured reality we inhabit, macroeconomic stability is an almost certain outcome instead. MSTR stock can still thrive amid macroeconomic order. Bitcoin halving and digital-asset sentiment factors position the company to continue benefiting from global cryptocurrency adoption. Instead of treating the Company as a dollar-crisis hedge, treat it as a low-weight cyclical momentum and long-term volatility investment. Be aware of the impending, natural downturn for Bitcoin in 2026. Since my last Strategy ( MSTR ) analysis , the stock has gained 11% in price. Evidently, the consensus has been brewing in the market that an impending U.S. dollar crisis is on the horizon. This has been dubbed a “debt death spiral,” and even, more ominously, “the end of the current world order.” Amid a rising China and more general geopolitical uncertainty, many are beginning to look for asymmetric assets to provide returns in the case of widespread federal debt default. Bitcoin ( BTC-USD ) is one of the most favored assets in the modern age. Gold ( GLD ), also, is gaining strong momentum. Strategy offers a unique high-beta leveraged Bitcoin exposure. In a world where the U.S. dollar collapsed amid the feared-of “debt death spiral,” Strategy stock would boom. Yet, a closer look at the macroeconomy and at the details of Strategy’s investment case shows that this isn’t a bet worth making. Instead, bet on continued U.S. leadership, a robust and strong macroeconomy evolving through robotics-enabled high GDP growth, and more peaceful relations with the U.S. and China leading to stabilized geopolitical conditions in the Western-led, but multipolar world order we are already firmly placed within. Strategy’s Investment Case is Strong Even Without Calamity The good news is, that even under normal macroeconomic conditions, Bitcoin is positioned to continue to prosper. This means Strategy is positioned for success in a “rain or shine” macro environment. As of Q1 2025, Strategy held approximately 528,185 bitcoins on its balance sheet; this was acquired for about $35.6 billion in total. At the time of this writing, that stash is worth over $55 billion. Bitcoin trends in approximately four-year cycles, most typically catalyzed by “halvings” (where the reward that Bitcoin miners get is cut in half). As a result, it requires surgical discipline and evaluation of these cycles to attain strong trading returns. Alternatively, Bitcoin or Strategy stock can be bought at a low valuation and held unswervingly through all periods of volatility. Over 70 public companies across the globe now hold Bitcoin on their balance sheets as a ” treasury standard. ” None of these tailwinds require hyperinflation or economic calamity. What makes Strategy clever is its capital-raising and Bitcoin-acquisition strategy. The company uses stock sales, convertible notes, and preferred equity offerings to expand its Bitcoin holdings. In Q4 2024 , the company issued over $15 billion in new equity, and in Q1 2025 it executed an At-The-Market stock offering worth $21 billion. With the proceeds, it bought hundreds of thousands of additional bitcoins. Critically, management has obtained favorable terms (like 0% coupon convertible notes) to minimize interest burden while maximizing treasury firepower. Even though the company continues to focus on Bitcoin, its enterprise software division remains operational. Whether this is a necessary component of the business anymore remains up for debate. There is certainly credence to the notion that Strategy should simply go “all in” on its Bitcoin strategy. Revenue from this segment is essentially flat to down, with total revenue of $463.5 million in Fiscal 2024 compared to $496.3 million in Fiscal 2023. However, the revenue-generating enterprise software division does provide cash flow for funding operating expenses, allowing the company to continue its long-term Bitcoin holding strategy without interruption from liquidation for expense reasons. A U.S. Dollar Collapse is Unlikely I believe it is important to put Strategy in perspective with current macroeconomic uncertainties. Most notably, the looming “debt death spiral” that figures like Dalio posed a couple of years ago as increasingly imminent amid the federal debt load and unmanageable interest payments. Dalio also warned that such destabilizing economic conditions often lead to reactive global conflicts amid a financial power vacuum. At this time, the dollar still accounts for approximately 60% of global foreign exchange reserves. China’s renminbi isn’t a realistic challenger because it’s connected to insufficiently open financial markets. Although there is ongoing discussion among industry experts of weakness in the dollar, a lot of this appears to be narrative-based fear to me. A return to visible strength in the U.S. government and America’s sustained military-security alliances continue to fortify the dollar-centric order. Given the deep structural factors that tie our world order together, a sudden collapse is highly unlikely. On the dark side of the equation is that U.S. public debt is widely projected to reach about 156% of GDP by 2055. That’s up starkly from about 100% in 2025. However, AI, robotics, and automation in general are poised to significantly alleviate this burden. Goldman Sachs ( GS ) has forecasted that AI could boost U.S. productivity growth by about 1.5% annually over the next decade. Also, McKinsey has forecasted that AI and automation could raise GDP growth in developed economies by 1.5-3.4% annually over the next decade. I’m more bullish, viewing U.S. real GDP growth of 5% annually as a very conservative estimate for the end of the next 10 years. This could mean 7-8% nominal GDP growth, well above the around 4.5% average interest rate on federal debt. 2025 real GDP growth is likely to be about 1.5-2% . This outlook, although still uncertain, does significantly withdraw credibility from the thesis of an impending fiat collapse. That affects the long-term return thesis for Strategy, which would (unfortunately) thrive most under exacerbated negative macro-financial conditions. However, the dollar is not on the brink of hyperinflation or collapse. In fact, the dollar is still globally dominant and backed by a dynamic economy. U.S. debt is high and rising, but stronger geopolitical relations and significant (presently undervalued) productivity gains from robotics could prevent the kind of runaway inflation or currency crisis that Bitcoin maximalists invest in light of. In essence, the “fiat endgame” thesis for Strategy stock is unlikely. This is true not only because of secular advanced tech trends, but also because of Western political activism in the White House and abroad to strengthen the current world order. Strategy Stock Offers Short-term Momentum Before Cyclical Downside I am quite certain that Strategy will continue to perform very well over the long term and achieve strong (likely market-beating) returns, even from the present high valuation. Bitcoin has become a dominant store of value, and it is now benefiting from substantial sentiment-driven tailwinds due to broad global, institutional, and retail adoption. That said, the cyclical dynamics of Bitcoin need to be clearly acknowledged. Given we have only recently had the Bitcoin halving in April 2024 , and Strategy stock is close to all-time highs, it’s prudent to be careful of an impending valuation down-cycle before the next major breakout to greater new highs some years later around the next halving. Due to these cyclical factors, I think it’s best to avoid buying Strategy stock or Bitcoin at this time if you’re a long-term holder. While there are short-term momentum factors at play that are bolstered by immediate geopolitical pressures and macro-fiscal concerns, I expect that come 2026 these will ease significantly. Bitcoin may rise to $550 in the near term, but this is essentially a short-term trade and should include a defensive take-profit target. Once interest rates are cut more substantially to allow a proper bull run in 2026 to unfold, the Bitcoin price will likely stabilize and then begin its periodic downturn in late H1 2026. My thesis is essentially hinged on the notion that short-term macroeconomic uncertainty will keep sentiment for Bitcoin elevated post-halving, but once more pronounced equity market bullishness sets in due to stabilized and persistently positive economic indicators and lower geopolitical pressure (cooling of Iran-Israel conflict, peace outlined in Ukraine, a more co-operative and gradually evolving China), Bitcoin will enter its next down-cycle. I am bullish on Strategy stock for now, but my Buy rating will become a Hold soon. Strategy 1-Week-Period Price Chart ( Author’s Chart, Using Seeking Alpha) Holding Cash is the Best Strategy to Protect From All Tail Risks Instead of buying Strategy stock as a hedge against U.S. fiscal collapse, which is an unlikely scenario, I believe it more prudent to hold a cash position to protect from all tail risks. Holding a high number of Bitcoin or Bitcoin-connected assets like Strategy elevates portfolio volatility and can lead to prolonged periods of underperformance, especially if the asset is bought at an unfavorable valuation just before a cyclical downturn, like in the next nine months or so. Instead, the cash strategy is agile and allows for opportunistic value investing without being heavily depleted in certain macro environments. U.S. Treasuries remain the most prudent, and secure, way to hold cash right now. The U.S. is still strong, the dollar is still the global reserve currency, and robotics will likely significantly shift the current “debt death spiral” narrative. In other words, it’s business as usual in my book, and the timeless value principles of Buffett remain true. Long-term holding, value investing, and a strong cash position; and “never bet against America”. I understand the fear of the looming debt crisis, but we should not forget that with the right focus on AI, robotics, energy, and strong geopolitical relations (with allies and “adversaries” alike), the U.S. can continue to lead and stabilize the present world order, even if it is multipolar. In such an environment, Strategy stock works as a high-beta, periodic high-alpha investment that should be bought at low valuations (like in 2023) and sold near peaks (like in the next nine months). Alternatively, you could take Strategy’s approach and hold Bitcoin or Strategy stock itself through all volatility, but expect significant periods of decline and you must ensure you buy during periods of low sentiment, not high. The risk that Bitcoin will lose positive sentiment traction over the long term appears very unlikely to me. Volatility should be expected, but other than risks with Strategy’s management not executing well-timed buys of the cryptocurrency, Strategy stock is actually a low-risk investment based on my analysis. Conclusion: Moderate Buy I do admire what Strategy has done. Not only is the investment model working (and quite simple in actuality), but it is also brave. Management will have to watch its equity value go through many periods of immense volatility, and as such, there will be moments where the company will be a market star and others where its light periodically fades. Even so, the long-term Bitcoin narrative is not going away, and sentiment for the cryptocurrency appears both robust and enduring to me. In light of this, and the dynamics of halving events, there’s reason to be long-term bullish on Strategy, but just watch for the impending downturn in the next year or so.

Source: Seeking Alpha