To The Moon

$Strategy(MSTR)$ is heading into its upcoming earnings (for the quarter ending September 2025, expected around Oct-30 after market close).

Bitcoin has hit 3-month low, so I think it might be appropriate to look at how the near‐term movement in Bitcoin (BTC) — and its implications for MicroStrategy Incorporated (MSTR) — are shaping up ahead of MSTR’s Q3 earnings (due ~Oct 30 2025).

What’s Going On With Bitcoin

Key facts / context:

Bitcoin has dropped to a 3-month low, trading around ~$104k-$110k.

Technicals: It has fallen below its 200-day moving average and broken a three-month trading range’s lower trendline.

Sentiment: Some analysts are cautioning that this may not yet be a sustained “bottom” but rather a pause or consolidation amidst macro-risks (geopolitics, bank stress, regulatory uncertainty).

Alternate view: Some support levels (trendlines/200-day MA) are being tested, meaning a rebound (short-term) is possible if bulls step in.

So: Bottom or dead‐cat bounce?

If Bitcoin found strong support and forms a base with increasing volume, it could spark a sustainable rebound (i.e., real bottom).

But signs of weakening fundamentals (e.g., usage, flows, active addresses) raise the risk that we’re looking at a dead-cat bounce (temporary lift, then further drop).

The probability of a true bottom is non‐zero but remains uncertain; risk remains that the market tests lower levels before establishing a base.

How Bitcoin’s Trajectory Could Affect MSTR

MSTR is heavily exposed to Bitcoin in several ways:

MSTR holds large amounts of Bitcoin either directly or via its business model. Thus Bitcoin’s price materially influences MSTR’s unrealised gains/losses, balance sheet, and investor sentiment.

MSTR’s upcoming Q3 results (Oct 30 2025 after market) are being watched in part through the prism of what Bitcoin has done.

Implications In Scenarios:

Bitcoin rebounds (bottom holds or breakout) → positive for MSTR: stronger unrealised gains, improved sentiment, potential upside surprise relative to market expectations.

Bitcoin continues downside or drifts sideways → negative for MSTR: may generate weaker quarter, lower gains from crypto holdings, possibly more conservative guidance, increased risk premium.

Other Factors for MSTR’s Q3:

Earnings expectations for MSTR’s Q3: EPS estimate around -$0.11 (i.e., a modest loss) and revenue ~$116.8 m.

Option sentiment: Some bearish tilt in MSTR options market; implied volatility elevated.

Thus the market is likely pricing in: “How much Bitcoin exposure / unrealised gains will show up?” and “Will MSTR be able to magnify Bitcoin’s upside or will it suffer from Bitcoin’s weakness?”

Market Anticipation of MSTR Q3

The consensus EPS estimate is modestly negative (≈ -$0.10 to -$0.11) and revenue around ~$116m. So there is low bar in operating business beyond Bitcoin holdings. TipRanks+1

The major wild card is the Bitcoin effect: whether gains (or losses) from the crypto side will swing the result materially.

If Bitcoin unexpectedly rises or stabilises, MSTR could beat expectations and the stock could respond strongly.

If Bitcoin continues decline or remains weak, MSTR may disappoint even if its business-operations are stable, because market will focus on the Bitcoin exposure.

Key Metrics / Things to Watch

Because MSTR is unlike a typical operating company, the metrics reflect both its software/analytics business and its massive exposure to Bitcoin (BTC). Some of the most important items:

Bitcoin holdings & cost-basis: MSTR’s value is strongly tied to how many BTC it holds and at what cost. Example: one article notes ~639,835 BTC held (valued ~$74.5 billion) with a very high BTC-beta.

Unrealised gains or losses on the BTC treasury: Because the company marks these assets at fair value (or close to it) and gains/losses on BTC can swing net income massively. For example, one write-up states: “At ~$107,986 BTC price → … net income ≈ $0; at ~$112,143 → sizeable gain; at ~$105k → major loss.”

Software/analytics business performance: While the BTC exposure dominates, the legacy business still contributes revenue and credibility. Articles point out that MSTR’s software business has had declines in recent years.

Equity issuance / dilution & debt leverage: To fund BTC purchases and growth, MSTR has issued new shares or debt. That affects share count, cost of capital, and downside risk.

Bitcoin price at quarter-end / guidance commentary: Because so much depends on BTC price, the commentary around how MSTR sees crypto, treasury strategy, future acquisition pace will matter.

Option/volatility sentiment: Because MSTR is extremely volatile and closely tied to crypto, implied volatilities around earnings and option pricing are key if you’re considering a trade. One Reddit post notes its IV “statistically broken” ahead of earnings.

MSTR implied volatility (IV) is 69.0, which is in the 47% percentile rank. This means that 47% of the time the IV was lower in the last year than the current level. The current IV (69.0) is 11.1% above its 20 day moving average (62.1) indicating implied volatility is trending higher.

What to Expect / Key Risks

If BTC price is modest or declines at quarter-end, MSTR may show a net loss (or smaller gain) even if its software business holds up well. The article on “profit threshold” for BTC indicates that if BTC ends below a certain level, net income turns negative.

Because MSTR leans so heavily on BTC, it effectively becomes a levered play on crypto. If crypto sentiment turns sour, MSTR can move hard downward. One analysis: “[MSTR] holds ~639,835 BTC… beta ~3.83; equity remains tightly correlated to BTC exposure.”

Dilution risk is real: issuing shares to buy more BTC or fund operations can hurt existing shareholders.

Because the company’s traditional business is small relative to its BTC play, investors will largely focus on that BTC treasury story — making it more of a sentiment/crypto-macro trade than a pure fundamentals software stock.

Summary

Bitcoin is at a key juncture: plausible support is being tested, but many risks remain; whether this becomes a meaningful bottom or a temporary bounce isn’t clear.

MSTR’s Q3 earnings are tightly linked to Bitcoin’s price action. A rebound in Bitcoin could lead to a positive surprise for MSTR; weakness in Bitcoin increases downside risk for MSTR.

The market expectation for MSTR (EPS ~-$0.10, revenue ~$115-120m) is relatively muted on the business side; the real driver is the crypto exposure.

From a risk management perspective: if we hold MSTR (or are considering it), we are essentially taking a leveraged bet on Bitcoin’s next move.

Appreciate if you could share your thoughts in the comment section whether you think MSTR would be able to show earnings surprise if Bitcoin stay range-bound and trade above MSTR BTC average BUY price.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.