| Factor | MSTR (Strategy™) | IBIT (iShares Bitcoin Trust) | Direct Bitcoin |
|---|---|---|---|
| Bitcoin exposure | ~2–3x leveraged (amplified moves both ways) | 1:1 — tracks Bitcoin directly | 1:1 — pure exposure |
| Management fee | None (it's a stock) | 0.25% annual expense ratio | None (self-custody) or exchange fees |
| Dilution risk | Ongoing — Strategy issues shares regularly | None | None |
| Debt risk | Significant — billions in convertible notes | None | None |
| Premium to Bitcoin | Typically 1.5–2x mNAV premium (median); up to 4x+ at bull market peaks | Tracks NAV within ~0.1% | No premium |
| Volatility | High — moves 2–3x Bitcoin's percentage swings | Same as Bitcoin | Same as Bitcoin |
| 401k / IRA access | Yes — any stock brokerage | Yes — standard ETF | Limited (some self-directed IRAs only) |
| Short selling | Yes — standard stock | Yes — standard ETF | Available on exchanges; limited in traditional accounts |
| Tax treatment (US) | Capital gains on stock — standard equity rules | Capital gains — standard ETF rules | Capital gains — property rules apply; each transaction taxable |
| Liquidity | High — major Nasdaq stock | Very high — world's largest Bitcoin ETF | High on major exchanges |
| Self-custody option | No — you own stock, not Bitcoin | No — custodied by BlackRock/Coinbase | Yes — full self-custody available |
The biggest variable in the MSTR vs ETF decision isn't fees or leverage — it's the mNAV premium. When you buy MSTR at 2x mNAV, you're paying twice the underlying Bitcoin value. At 1x mNAV, you're paying exactly what the Bitcoin is worth.
Bitcoin ETFs always trade near 1x NAV (within 0.1%). MSTR's premium fluctuates dramatically.
This means:
Check the current mNAV ratio before making any comparison: MSTR mNAV Calculator →
IBIT charges 0.25% per year. On a $100,000 position held for 10 years, that's approximately $2,500 in fees (compounded, assuming flat price). MSTR charges no management fee.
However, MSTR's ongoing share issuance creates effective dilution — the BTC-per-share ratio is constantly under pressure from new share sales. The effective "cost" of dilution depends on the pace of issuance and the mNAV at which shares are issued.
At high mNAV ratios (3x+), share issuance is NAV-accretive (they buy more Bitcoin than they dilute). At low mNAV ratios (close to 1x), issuance approaches dilution-neutral. The dilution cost is hard to quantify precisely — which is why Strategy publishes the BTC Yield metric to give shareholders a view of how BTC-per-share is trending.
Bottom line: IBIT's 0.25% fee is a known, fixed cost. MSTR's dilution impact is variable and depends on management decisions. Neither is obviously better — it depends on the mNAV regime.
Both MSTR and Bitcoin ETFs are taxed as standard investments under US rules:
Direct Bitcoin is treated as property — every sale, swap, or spend is a taxable event. This makes direct Bitcoin more administratively complex, especially for active traders.
Within a Roth IRA or traditional IRA, all gains in MSTR or Bitcoin ETFs are tax-advantaged (no capital gains tax within the account). This is a significant advantage over direct Bitcoin, which can't easily be held in retirement accounts.
The MSTR vs ETF decision hinges on the current mNAV premium. Check it live before allocating. Open MSTR mNAV Calculator →
We alert subscribers when MSTR's mNAV drops to levels where it's potentially more attractive than Bitcoin ETFs.
Disclaimer: This content is for informational purposes only and does not constitute financial or investment advice. MSTR, Bitcoin ETFs, and Bitcoin are volatile assets. Always consult a qualified financial advisor before investing.