An analyst, with a username of @lowstrife, issued a series of warnings on the social media platform X with respect to Microstrategy’s financial health, which caused parallels between the company’s capital strategy and the now disappeared structure of the Bitcoin Trust.
Microstrategy, now renamed as a strategy, is a company that quotes in the stock market that quotes in the Nasdaq stock exchange under the Ticker $ Mstr. It is the largest Bitcoin Treasury company, which has a significant amount of $ BTC as its main reserve asset.
The Bitcoin Trust of the Gray Scale, with a $ GBTC Ticker symbol, is a bag quoted in the stock market (ETF) that is invested only and passively at $ BTC. It allows investors to obtain exposure to $ BTC without buying, storing or securing it directly.
Critical Mnav for $ Mstr survival
In a X threadLowstrife emphasized that the $ MSTR destination is closely linked to its net market asset value (MNAV), a metric based on feelings that reflects the perception of the investor instead of real assets.
He stressed that if the $ Mstr MNAV weakens, the company’s capacity to collect capital could collapse. The convertible debt, in particular, raises a threat to Mnav by undermining the company’s capacity to meet its financial obligations.
Then, the analyst drew a parallel comparison with the decrease in $ GBTC, which shot in popularity during the 2021 upward market while investors sought indirect exposure to $ BTC. However, when the demand vanished, the $ GBTC structure was unraveled.
Lowstrife warned that Microstrategy could face a similar trajectory if MNAV hesitates, finally paralyzing his ability to collection of funds and destabilizing his strategy focused on Bitcoin.
“GBTC was a closed background that floated with a premium or discount in relation to the underlying assets. Once the demand for this exhibition was exhausted, the demand for the fund to buy new assets also exhausted … Once Mnav was crushed, that went to demand.”
Mute thread
Lowstrife said that investors are currently buying $ MSTR for reasons similar to those once fed $ GBTC, which is a way to obtain an indirect exposure of $ BTC.
However, he pointed out that the investment panorama has evolved. With broader and easier access to $ BTC through various platforms and financial products, the attractiveness of $ Mstr as a proxy at $ BT is fading.
As $ BTC becomes more accessible, the justification for using $ Mstr as a substitute weakens, which potentially undermines its value proposition.
The analyst emphasized that there is no inherent mechanism that forces MNAV to align with the real value of the company’s assets, which makes it especially fragile.
“Remember, Mnav is completely based on feelings. There is no mechanism or reason why it needs to trade with what assets are worth.”
Mute thread
Structural risks of $ mstr
Mute thread noted That an important problem for $ Mstr is at its $ 8.2 billion in pending convertible bonds, which mature between 2028 and 2032. He explained that the central problem is not the volatility of Bitcoin prices, but the performance of $ Mstr shares.
Since these are convertible bonds, successful conversion depends on $ Mstr shares appreciating predefined levels. If the action does not reach those levels, the debt cannot become capital, which raises a significant financial challenge.
Since the price of $ MSTR shares is largely driven by its MNAV, a metric based on feelings, a loss of investor confidence could prevent conversion from occurring. If this price assessment does not materialize, Lowstrife warned that the company can be forced to pay the cash bonds, which may require that they liquidate the holdings of $ BTC.
“If, for any reason, this appreciation of prices does not happen, this becomes a problem based on time instead of prices based. Debt can overcome, regardless of what is the underlying price of Bitcoin … Mstr must refinance or pay the cash debt, sell BTC.”
Mute thread
Risk of Reversion of the steering wheel
Lowstrife also raised concerns about the stability of the $ Mstr financial model, warning that the company could be forced to relax its strategy if MNAV falls below 1.0. A fall below that threshold would affect the company’s capacity to raise capital and could lead to shares while liquidating $ BTC.
He pointed out that a compressed MNAV would weaken the $ MSTR capacity for future capital increases and $ BTC acquisitions, which could erode the intrinsic value of the action. The situation could deteriorate even more if the company must administer debt payments in unfavorable conditions.
The analyst also added that there may even be a fiduciary pressure to act if MNAV continues to decrease.
“In the end, the steering wheel will work well in reverse to relax the entire scheme. Recover the actions below MNAV 1.0 and sell the underlying assets to finance it … there is an argument for a fiduciary responsibility to do this, and [President and CFO Andrew] Bailey is outside telling him that he will do this. ”
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Finally, Lowstrife delivered a criticism of the financial engineering of President Michael Saylor, comparing it with the risky tactics that led to the financial crisis of 2008, which $ BTC was created to address.
“It is not a financial revolution. It is the leverage of Ponzi HypebeasSts chasing.
Mute thread
What happened to $ GBTC??
A nightmare occurred, and that was when institutional investors left $ GBTC.
The most popular departure event was when the Wisconsin State Investment Board completely liquidated its holdings of $ 63.7 million of $ GBTC in the first quarter of 2025 and reassigned the position to Ishares Bitcoin Trust, another ETF managed by Blackrock with a $ ibit symbol, before selling that too.
Other large asset administrators, including Millennium Management and Brevan Howard, have also chosen to cut or change their exposure to ETF to alternative funds.
Analysts cite the highest rates of $ GBTC and the monitoring of inefficiencies as key reasons for their decrease in popularity. After its conversion to an ETF Spot, the product has not been able to recover its previous domain in the market.
As $ BTC approaches its historical maximum of $ 110,000, $ GBTC remains eclipsed by more competitive offers.
This article is published in Bitpins: Analyst warns: Bitcoin Treasury stocks as Mstr could go to a collapse, and here is why
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