On February 25, 2025, the financial world trembled as shares of MicroStrategy (MSTR), considered a benchmark for Web 2.0 companies investing in cryptocurrencies, plummeted by over 55%. The company, which holds nearly $43.7 billion worth of Bitcoin, is once again in the spotlight—this time, in a highly negative context. The key question on everyone’s mind: Can Michael Saylor’s company survive, or will it be forced to liquidate its massive Bitcoin holdings? Analysts at The Kobeisi Letter have taken a deep dive into this issue. Here are the details.
The Bitcoin Giant – How It All Started
Under the leadership of the charismatic Michael Saylor, MicroStrategy has been following an extraordinary strategy:
transforming itself into a “Bitcoin vehicle.” The company has amassed approximately 499,096 BTC, acquiring them at an average price of $66,350 per coin. Their business model is simple yet highly risky: issue zero-interest convertible bonds, buy Bitcoin, push up its value, and then issue new shares at a higher price to repeat the cycle. So far, this strategy has worked—but what happens if Bitcoin falls significantly below their entry price?
MicroStrategy’s Bitcoin Holdings – A Dangerous Position?
This isn’t the first time MicroStrategy has faced such a scenario. In 2022, during the bear market, Bitcoin plunged from $70,000 to just $15,000, yet the company managed to survive without selling its Bitcoin. However, the current crisis raises a critical question: Is this time different? The key lies in the company’s debt structure and its ability to secure fresh capital.
With $12.5 billion in Bitcoin holdings and $8.2 billion in debt, the company may struggle to raise new capital—especially if investors lose faith in Saylor’s “Bitcoin dream.” Saylor himself claims that even if Bitcoin dropped to $1, the company would not be liquidated—instead, he would „buy all the Bitcoin.” While this sounds like a bold statement of faith, bondholders may not share his enthusiasm.
The recent drop in Bitcoin’s price and MicroStrategy’s stock is the first major test since the company’s rise to prominence in 2024. The cryptocurrency market is known for extreme volatility, and “flash crashes”—sudden price collapses—are becoming more frequent. For MicroStrategy, every such episode serves as a reminder that its business model relies on a steady flow of new capital. If investors stop „buying the dips,” the company may face a difficult choice: hold its Bitcoin and risk insolvency, or sell and go against its core philosophy?
The Future is in Saylor’s Hands
MicroStrategy has bought itself time thanks to its debt structure, but it is not invincible. Forced liquidation is technically possible, though unlikely—it would require a catastrophic scenario where Saylor loses control of the company or the market completely turns against Bitcoin. For now, the company remains a stronghold of crypto optimism, but its fate depends on investor confidence and the unpredictable swings of the market.
Will MicroStrategy survive this storm? Saylor calls the current downturn a “Bitcoin sale” and urges people to buy. Time will tell whether his vision is one of genius or reckless illusion.
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