MSTR stock extended its rebound on Friday as Bitcoin climbed to its highest level since May. Strategy shares gained about 9% in premarket trading on Aug. 21 after rallying sharply during the previous two sessions. Strategy, the enterprise-software company formerly known as MicroStrategy, began buying Bitcoin for its corporate treasury in August 2020 and adopted its current name in 2025, a shift that turned the stock into a widely followed proxy for Bitcoin exposure in U.S. equities.

Bitcoin traded near $77,484 during the session, up almost 7% on the day and more than 20% for the week. The move pushed BTC back above Strategy’s average acquisition cost and strengthened the company’s Bitcoin treasury position.

Is MSTR Stock Seeing a Short Squeeze?

In the last two trading sessions, Strategy’s MSTR stock added $7 billion to the company’s market capitalization, after rising 25% over the period. Strategy chairman Michael Saylor said, “we have the option to not sell MSTR, and that rips the faces off the shorts.” He appeared to suggest that the company’s ability to withhold shares from the market could contribute to a short squeeze.

A short squeeze typically unfolds when rising prices force traders who have sold borrowed shares to buy them back, which can add further buying pressure to an already advancing stock.

MSTR also surpassed Google’s GOOG in trading volume, becoming the 17th-most-traded U.S. stock. The stock surged more than 11% in pre-market trading to above $125.

According to the supplied data, 12 Wall Street analysts have an average MSTR stock price target of $257, implying about 105% upside from current levels.

The move in MSTR followed a sharp rebound in Bitcoin. Over the past week, BTC rose from $62,000 to $77,000, strengthening the appeal of the BTC-proxy trade.

MSTR Stock Sees Strong Demand, Reclaims BTC Cost Basis

During the second quarter of this year, more than 17 institutional investors across eight countries increased their MSTR stock holdings. Among the largest buyers was Goldman Sachs, which significantly increased its position.

BlackRock added about 1.64 million shares, alongside other buyers including Capital International Investors, Vanguard, and State Street. Strategy’s addition to the Nasdaq-100 index in December 2024 has also broadened its base of index-tracking shareholders.

Following the recent 25% weekly rise in Bitcoin, Strategy is sitting on approximately $875 million in unrealized profit on its Bitcoin holdings.

Strategy holds 840,447 BTC at an average purchase price of $75,385 per Bitcoin. If Bitcoin rises to $100,000, Strategy’s unrealized profit would reach approximately $20.7 billion.

With BTC trading at $75,613, the company has moved back above its cost basis and is sitting on approximately $192 million in unrealized gains, according to official data. Under fair-value accounting for digital assets, Strategy marks its Bitcoin holdings to market in its financial statements, so swings above or below the average purchase price flow directly into reported results.

Has the Bitcoin Rally for the Long Term Just Begun?

The recent Bitcoin rally has lifted the broader crypto market and triggered major short liquidations. Some market participants believe there may still be room for further gains.

Crypto Patel said Bitcoin’s supply dynamics could offer a key signal for the next phase of the market rally. The analyst highlighted Binance’s Bitcoin supply at approximately 3% of total supply, an MVRV ratio of 1.31, and a strengthening Stock-to-Flow (S2F) metric. MVRV, or market value to realized value, compares Bitcoin’s market capitalization with its realized capitalization, the value of the coin supply priced at each coin’s last on-chain movement, while Stock-to-Flow compares existing supply with annual new issuance, a long-standing gauge of scarcity.

Blockchain analytics firm Glassnode said Bitcoin has erased three months of underperformance against the S&P 500 over the past 72 hours. The firm noted that periods of relative Bitcoin underperformance are common, but when BTC begins to outperform the S&P 500, the excess gains tend to be significant.

This article is for informational purposes only and does not constitute financial advice. Equity and cryptocurrency markets can experience sharp price movements.