Although the Bitcoin treasury company Strategy (MSTR) has maintained its position in the Nasdaq 100 index, concerns about the sustainability of the company's business model are increasing, with new analysis pointing to 2028 as the critical year for the company's survival.
The company now has a Bitcoin position that is large enough to impact the broader market. Their holdings are far larger than a typical whale wallet.
Tiger Research: 2028 is the real test
The blockchain research firm Tiger Research has identified 2028 as the major risk point in its analysis of Strategy's financial structure.
The report highlights a critical shift in Strategy's capital raising strategy. Until 2023, the company relied on cash reserves and small convertible loans, keeping the holdings in the low 100,000 BTC range. From 2024, Strategy dramatically increased leverage by combining preferred equity, ATM programs, and large convertible issuances. This created a feedback loop where rising Bitcoin prices enabled even larger purchases.
The problem: The purchase options on these convertible bonds are concentrated in 2028, creating around $6.4 billion in redemption pressure. Investors can demand early repayment, and the company cannot refuse.
No cash flow, no safety net
Tiger Research points to a fundamental vulnerability: Strategy used virtually all raised capital to buy Bitcoin instead of productive assets that generate cash flow.
"Had the funds been used for productive assets, the company would have had a natural source of repayment," notes the report. "Instead, the focus on Bitcoin accumulation leaves little cash available for redemption."
If refinancing options are blocked in 2028, Strategy must sell about 71,000 BTC at $90,000. This amounts to 20-30% of the daily trading volume and could potentially trigger a downward spiral across the market.
Bankruptcy threshold rises
Strategy's static bankruptcy threshold stands at $23,000 starting in 2025—requiring a price drop of 73%. However, this level has steadily increased from $12,000 in 2023 to $18,000 in 2024, as debt growth has outpaced Bitcoin accumulation.
"Strategy's structural risk appears low under normal circumstances, but becomes highly concentrated in 2028," warns Tiger Research. "If refinancing fails, a sell pressure could arise that is large enough to impact the entire Bitcoin market."
The report notes that newer digital asset treasury companies face even greater risks because they lack Strategy's multilayer security mechanisms, which were built through surviving the downturn in 2022.
Nasdaq 100 holdings despite skepticism
Meanwhile, Strategy avoided being removed from the Nasdaq 100 in the index's regular rebalancing announced last weekend. Nevertheless, the global index provider MSCI will assess Strategy's inclusion in January, where some market observers believe their buy-and-hold Bitcoin model resembles more of an investment fund than a tech company.
Strategy was the pioneer behind the corporate-driven Bitcoin treasury model in 2020, leading to many imitators globally. But as volatility in Bitcoin pushes stock prices down—Strategy has fallen 47% in three months—questions are increasing about whether this leveraged bet can withstand the upcoming debt obligations.
