💥 Are Banks Pushing Bitcoin Into a Death Spiral? The Real Story
A recent analysis explains how MicroStrategy’s debt and Bitcoin holdings could create a dangerous chain reaction — and why some investors think banks are involved.
1️⃣ What a “Death Spiral” Means
History shows that certain debt structures can push an asset into collapse:
Ottoman Empire & Greece → forced to sell national assets
2000s “floorless convertibles” → lenders shorted stocks as prices fell
When falling prices benefit lenders, the system collapses on itself.
2️⃣ MicroStrategy’s Bitcoin Position
MicroStrategy functions like a giant Bitcoin fund.
~650,000 BTC (≈ $59B)
Bought for ~$48B
~$16B in debt
Low LTV at 11%
But owes ~$800M per year in interest + preferred dividends
They built a ~$1.44B reserve — enough for 21 months.
3️⃣ The Key Risk: MNAV (Premium or Discount)
MicroStrategy’s plan depends on whether its stock trades above or below its Bitcoin value.
✔️ If MSTR trades at a premium (MNAV > 1):
They issue new shares, raise cash easily, and avoid selling Bitcoin.
⚠️ If MSTR trades at a discount (MNAV < 1):
They stop issuing equity.
If the 21-month reserve runs out, they must sell Bitcoin to pay obligations.
This could trigger a death spiral:
Selling BTC → price drops → MSTR value drops → more selling.
4️⃣ Are Banks Behind It?
No proof exists that banks like JP Morgan are attacking MSTR.
But negative reports can influence sentiment, which helps short sellers.
So there’s pressure — but no confirmed manipulation.
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