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链研社lianyanshe
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MicroStrategy's maximum floating profit exceeded $33 billion, and this morning it fell below $60,000, which means MicroStrategy faces a paper floating loss of over $11.4 billion.
Many people are curious about how they survived the last bear market? Will this bear market lead to liquidation?
First, let's review that MicroStrategy's holding cost in the last round was $30,000. They managed to survive the bear markets of 2022 and 2023 because their approach was different from leveraged cryptocurrency trading, as they engaged in long-term debt financing.
Most of the debt ($2.2 billion) is unsecured convertible bonds, which can cross cycle and mature between 2025-2028. The most dangerous time was when a $200 million mortgage fell below $21,000, triggering a margin call notice, but at that time, MicroStrategy had 130,000 bitcoins, which could pull the liquidation line down to $3,561.
In this round, according to their financial report:
Total holdings: 713,502 BTC (Total cost $54.26 billion)
Average cost: $76,052
Core debt: Convertible bonds $8.21 billion
Preferred stock: $8.39 billion
Total leverage scale: $16.6 billion
Cash reserves: $2.25 billion
In 2025, they also raised $25.3 billion through stock issuance (ATM issuance) without the need to repay principal and interest.
From the data, MicroStrategy has almost no risk of liquidation.
1. Currently, the cash on hand is sufficient to cover the interest on current debts and preferred stock dividends for 30 months (2.5 years).
2. The 710,000 BTC is not pledged, so there is no risk of forced liquidation like in the previous round.
3. The maturity date is far away; the recent large-scale debt is due in the third quarter of 2027. Before 2027, regardless of how low the coin price drops, MicroStrategy has no legal obligation to repay the principal.
However, the biggest problem now is that although there is no liquidation risk, due to the disappearance of the premium, MicroStrategy cannot continue to finance through ATM to buy coins, interrupting the compound growth. By 2027, if the bitcoin price is below $76,000, MicroStrategy will also be unable to issue new debt to repay old debt for turnover. At that time, they might sell a small amount of bitcoin for turnover or issue a large volume of junk bonds to repay debts, but whether anyone will buy is a question.
Many people are curious about how they survived the last bear market? Will this bear market lead to liquidation?
First, let's review that MicroStrategy's holding cost in the last round was $30,000. They managed to survive the bear markets of 2022 and 2023 because their approach was different from leveraged cryptocurrency trading, as they engaged in long-term debt financing.
Most of the debt ($2.2 billion) is unsecured convertible bonds, which can cross cycle and mature between 2025-2028. The most dangerous time was when a $200 million mortgage fell below $21,000, triggering a margin call notice, but at that time, MicroStrategy had 130,000 bitcoins, which could pull the liquidation line down to $3,561.
In this round, according to their financial report:
Total holdings: 713,502 BTC (Total cost $54.26 billion)
Average cost: $76,052
Core debt: Convertible bonds $8.21 billion
Preferred stock: $8.39 billion
Total leverage scale: $16.6 billion
Cash reserves: $2.25 billion
In 2025, they also raised $25.3 billion through stock issuance (ATM issuance) without the need to repay principal and interest.
From the data, MicroStrategy has almost no risk of liquidation.
1. Currently, the cash on hand is sufficient to cover the interest on current debts and preferred stock dividends for 30 months (2.5 years).
2. The 710,000 BTC is not pledged, so there is no risk of forced liquidation like in the previous round.
3. The maturity date is far away; the recent large-scale debt is due in the third quarter of 2027. Before 2027, regardless of how low the coin price drops, MicroStrategy has no legal obligation to repay the principal.
However, the biggest problem now is that although there is no liquidation risk, due to the disappearance of the premium, MicroStrategy cannot continue to finance through ATM to buy coins, interrupting the compound growth. By 2027, if the bitcoin price is below $76,000, MicroStrategy will also be unable to issue new debt to repay old debt for turnover. At that time, they might sell a small amount of bitcoin for turnover or issue a large volume of junk bonds to repay debts, but whether anyone will buy is a question.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.