The gap between basic mNAV and fully diluted mNAV is getting wider. The core reason is simple: companies are issuing more and more "potential shares" like convertible bonds, preferred stock, and options, but the growth of their Bitcoin holdings isn't keeping up with the pace of share dilution.
The gap itself is not surprising—it has always existed. What really matters is that the gap is widening. For example, Strategy's basic mNAV and fully diluted mNAV used to differ by only about 0.1x, but now the gap can reach 0.4x or even higher.
Step 1: Understand the difference between the two mNAV measures
First, make sure you know which type of "mNAV" you are using, otherwise comparisons are meaningless.
Basic mNAV
- Formula: Company market cap ÷ Bitcoin holdings market cap
- Denominator: Shares Outstanding — the number of common shares actually in circulation today.
- It shows: For each $1 of BTC held, how much market cap current shareholders hold on average.
Fully Diluted mNAV
- Denominator: Fully diluted share count — the total number of shares if all convertible bonds, preferred stock, options, and RSUs (restricted stock units) were converted into common shares (source: DeFiLlama analyst Meta, 2025-09-26).
- It shows: How much BTC each share would represent if all potential shares became real shares.
Goal: You can clearly state whether the mNAV figure you're looking at uses shares outstanding or fully diluted shares.
A common mistake: Many people mix up these two measures when discussing mNAV, making the same company look both undervalued and overvalued. For example, SONN can be calculated at 0.06x using basic shares (seemingly extremely cheap) or at 5.27x using fully diluted shares (seemingly very expensive). Both numbers are correct; they just use different denominators (source: DeFiLlama analyst Meta, 2025-09-26).
Step 2: Track the accumulation of "potential shares"
The immediate reason for the widening gap is that companies are issuing a lot of convertible bonds and preferred stock to raise money for buying Bitcoin.
How to do it:
- Find the company's latest balance sheet and check:
- Convertible bond balance and conversion price
- Preferred stock issuance and conversion terms
- Number of unexercised employee stock options
- Convert these "potential shares" into the equivalent number of common shares, and compare that to shares outstanding.
Strategy is a typical case: Over the past few years, the company has raised large amounts of money to buy Bitcoin by issuing convertible bonds and preferred stock (such as STRK, STRC, STRD, etc.). When these instruments are exercised or converted, they create many new common shares. As of 2023, fully diluted shares exceeded shares outstanding by about 61.4 million shares (source: Bitget report, 2025-01-28). This gap has been growing with the issuance of more financing tools.
Goal: You can list the company's total "potential shares" and what percentage they represent of shares outstanding (e.g., 30%, 50%, or even double).
Risk note: NYDIG's head of research pointed out that mNAV metrics often use "assumed shares outstanding," which frequently includes convertible bonds that haven't yet met conversion conditions, potentially making the data inaccurate (source: NYDIG, 2025-06). This means fully diluted mNAV assumes all potential shares are converted "today," but in reality, many conversion triggers are future events. If you only use fully diluted mNAV for your judgment, you may become overly pessimistic.
Step 3: Check if Bitcoin price growth has kept up with share growth
Shares are increasing, but if the company's total BTC holdings also grow at the same pace, the BTC per share can be maintained. This is the "BTC Yield" concept that Strategy has been emphasizing.
How to do it:
- Compare the growth rate of fully diluted share count over a period (e.g., one quarter).
- Compare the growth rate of the company's total BTC holdings over the same period.
- If shares grow faster than BTC holdings, the BTC per share will drop, and the gap between basic and fully diluted mNAV will inevitably widen.
According to Strategy's updated investor metrics in July 2026, the company introduced the "Net BTC per share" metric, which deducts net debt and preferred stock obligations from the calculation to show the Bitcoin exposure actually available to common shareholders (source: HTX report, 2026-07-24). This adjustment is itself an acknowledgment that the gap between basic and fully diluted mNAV has become so large that a separate "net" measure is needed.
Goal: You can calculate whether the company's BTC per share has increased or decreased over the past year, and by roughly what percentage.
How to verify your work
Go to Strategy's investor website or a third-party dashboard like BitcoinTreasuries.net, and find the company's three mNAV figures (Basic, Diluted, EV). Compare the differences between them, then check against the company's balance sheet to see how much of the gap can be attributed to convertible bonds, preferred stock, and cash reserves. If the three numbers differ by less than 0.1x, the gap is small. If they differ by more than 0.3x, the "potential shares" have a significant impact on common shareholders.
Suggested next step: If you hold relevant stocks, consider treating fully diluted mNAV as a "stress test" metric. Basic mNAV is the optimistic scenario (assuming no new share dilution), while fully diluted mNAV is the pessimistic scenario (assuming all potential shares convert). Using these two numbers to form a range gives you a more solid judgment than looking at just one. Each time the company announces new financing, update both figures accordingly.
