The market downturn has hit Bitcoin hard, but one of its biggest corporate holders, Strategy (formerly MicroStrategy), has taken an even greater beating.
The firm’s stock has dropped over 50% since its November 2024 highs, fuelling concerns about whether it could be forced to liquidate some of its massive Bitcoin holdings.
Not so Soon
Strategy (MSTR) has been one of the most Bitcoin-correlated stocks on the market, riding BTC’s price action through multiple cycles. However, its recent 55% plunge from its peak of $543 to around $250 raises serious questions about the company’s financial stability and ability to continue its aggressive BTC accumulation.
Despite the price drop, Strategy’s 499,096 BTC holdings remain profitable, purchased at an average price of $66,300 per coin. With Bitcoin trading around $87,000, the company still sits on over $10 billion in unrealized profits.
However, with leveraged exposure and convertible debt maturing in the coming years, analysts are questioning whether the firm could be forced to sell if BTC’s price dips further.
Will Strategy Be Forced to Sell?
One of the biggest concerns is Strategy’s outstanding $8.2 billion in debt, with two major convertible bonds maturing in 2029 and 2030. While these bonds are currently out of the money, they make up $5 billion of the total debt.
Some analysts argue that a further 50% decline in Bitcoin’s price (to $44,000 or lower) could pressure the company to sell BTC to meet debt obligations.
However, others point to Strategy’s ability to raise capital through equity offerings and additional convertible notes, delaying any liquidation risk. CEO Michael Saylor has also publicly dismissed liquidation concerns, stating that Strategy would “buy all the Bitcoin” if prices fell dramatically.
Institutional Bitcoin Adoption vs. Market Stress
Interestingly, while Strategy is struggling, institutional interest in Bitcoin remains strong. The latest Bitcoin ETF data shows cumulative inflows of $39.03 billion, but also $539 million in outflows on February 24. Meanwhile, Citadel Securities is reportedly entering the crypto market as a liquidity provider, potentially stabilizing volatility in the long term.
With Bitcoin sitting at a crucial support level and the firm’s stock under pressure, all eyes are on whether the firm can weather this storm without offloading any BTC.
