Microstrategy (now strategy), the corporate intelligence company, is having operational challenges at this time. Since their first level of November of $ 475, their shares have It fell more than 55%.
This has raised doubts about his creative business plan focused on Bitcoin. Given the volatility of the current of Bitcoinwhich has fallen up to $ 86,000 after a loss of 9%, market observers wonder about the sustainability of the strategy approach.
STRATEGY: TERRIBLE MARKET CONDITIONS
The commercial approach model is essentially based on an ambitious plan that has made the company a regular software organization into a Bitcoin power. At this time, the Corporation has bought 499,096 BTC for a total of $ 43.7 billion. A new Debt issuance At the beginning of this month of $ 2 billion, the average cost per Bitcoin has increased to $ 66,350.
This aggressive acquisition strategy implies borrowing through 0% of convertible notes, buying bitcoin to generate higher prices, sell new actions and use income to acquire even more bitcoin. The cycle has been profitable so far; However, current market conditions represent a threat to sustainability.
Microstrategy liquidation:
As Microstrategy, $ MstrerIt falls more than -55%, many ask about “forced liquidation.”
The company now has Bitcoin worth $ 44 billion, could they be forced to sell it?
Is liquidation possible? Let’s explain.
(A thread) pic.twitter.com/gcdzvu2gva
– Kobeissi’s letter (@kobeissiletter) February 25, 2025
Liquidation of concerns but are still unlikely
According to Kobeissi’s letter research, the strategy would be vulnerable to liquidation pressure if the price of Bitcoin falls below $ 66,000 and remains there. This crucial level represents the average acquisition cost of the company. Even so, many elements suggest that the liquidation will be unlikely even with the current market volatility.
The strategy has $ 8.2 billion in debt against $ 43.4 billion in Bitcoin, providing a substantial mattress. More importantly, most of the company’s convertible notes do not mature until 2027, giving the strategy a valuable time to resist short -term volatility. Since its Bitcoin strategy began in August 2020, the company has supported several significant price corrections without selling its holdings.
BTCUSD trading at $88,949 on the daily chart: TradingView.com
Market conditions differ from previous recessions
Today’s Bitcoin market has more institutional support than during the past “Crypto Winters”. The current ecosystem has better foundations, and large companies are beginning to use Bitcoin reserves.
Rezolve AI recently announced a plan to invest $ 1 billion in Bitcoin And it has already committed $ 100 million. Countries have started using similar methods, which makes more people want to buy cryptocurrencies. These changes in the market structure suggest that Bitcoin can be more resistant than during past recessions, which could support the long -term thesis of the strategy.
Meanwhile, despite the prediction of the co -founder of Bitmex, Arthur Hayes, more decreases, the most popular cryptography in the world remains solid, since it has reached maximum of all time above $ 109,000.
The history of the strategy of maintaining through cycles and structuring debt with distant maturities protects it from immediate liquidation pressure. However, its fall in the price of shares limits flexibility, maintaining its controversial model under tension.
Night image of Gemini Image, TrainingView graphic
