MicroStrategy’s Bitcoin Bet Faces Growing Pressure Amid Market Uncertainty

MicroStrategy's stock has fallen over 55%, raising concerns about whether the company could be forced to sell its substantial Bitcoin holdings, which total nearly 500,000 BTC worth $43.7 billion.

Despite its strategy of accumulating Bitcoin at an average price of $66,350 per coin, questions are emerging about whether recent market conditions could trigger liquidation.

The company funds its Bitcoin purchases through methods like issuing 0% convertible notes and selling stock, maintaining a $43.4 billion Bitcoin portfolio and $8.2 billion in debt.

Much of the debt is due in 2028, reducing immediate risks. However, a forced liquidation would require either bankruptcy or a shareholder decision to dissolve the company, which is unlikely given Michael Saylor’s 47% voting control.

A major price decline in Bitcoin would have to happen for a liquidity crisis, but Saylor has dismissed such concerns, even joking that MicroStrategy would buy more Bitcoin if prices fell drastically. If Bitcoin and MicroStrategy’s stock continue to slide, the company may struggle to raise capital, threatening its strategy and long-term viability.

Investors now face a tough choice: continue supporting the firm’s high-risk Bitcoin bet or reevaluate their investments.