{"id":606,"date":"2025-04-14T04:05:05","date_gmt":"2025-04-14T04:05:05","guid":{"rendered":"https:\/\/trazfomerluki.com\/?p=606"},"modified":"2025-07-22T10:55:37","modified_gmt":"2025-07-22T10:55:37","slug":"can-strategy-survive-a-bitcoin-crash-the-companys-risky-capital-model-under-scrutiny","status":"publish","type":"post","link":"https:\/\/trazfomerluki.com\/index.php\/2025\/04\/14\/can-strategy-survive-a-bitcoin-crash-the-companys-risky-capital-model-under-scrutiny\/","title":{"rendered":"Can Strategy Survive a Bitcoin Crash? The Company\u2019s Risky Capital Model Under Scrutiny"},"content":{"rendered":"

\"Why<\/p>\n

The post Can Strategy Survive a Bitcoin Crash? The Company\u2019s Risky Capital Model Under Scrutiny<\/a> appeared first on Coinpedia Fintech News<\/a><\/p>\n

MicroStrategy<\/a> Incorporated, recently renamed as Strategy, is the largest publicly traded corporate owner of Bitcoin, with 528,185 BTC purchased at an average price of $67,458, with total acquisition cost of $35.63 billion. <\/p>\n

As of April 2025, its Bitcoin holdings are worth around $41.3 billion, with the most recent purchase of 22,048 BTC for $1.92 billion on March 30 at $86,969 per BTC. Bitcoin is now Strategy’s main treasury reserve asset, and its BTC Yield\u2014a key performance indicator  measuring Bitcoin per share\u2014rose 11% YTD during Q1, aiming for 15% annually to 2027.<\/p>\n

Microstrategy SEC filing<\/h2>\n

SEC filings in recent times point to the volatility that comes with Strategy’s Bitcoin model. During Q1 2025, the firm had a $5.91 billion unrealized loss caused by a price fall to $77,351, which was offset by a $1.69 billion tax benefit. <\/p>\n

The capital structure of the company is comprised of $8.65 billion raised in the form of equity and debt since 2020, for funding continuous Bitcoin acquisitions. The highlight was raising $2 billion in February 2025 using zero-coupon convertible notes that are due in 2030. Strategy also went public with a preferred stock (STRK) offering during Q4 2024 and raised $584 million.<\/p>\n

In spite of volatility, the firm’s overall Bitcoin holding is still in profit with an unrealized gain of 14.62%. Its software segment still lags behind, reporting $120.7 million in Q4 2024 revenue, down 3% YoY, and failing to produce positive operating cash flow. The firm depends greatly on financing for its operations and Bitcoin acquisitions, having done a 10-for-1 stock split in July 2024 to increase share availability.<\/p>\n

Liquidation risk is contained at present. With $8.2 billion in unsecured loans and no collateralized loans for Bitcoin<\/a>, Strategy could potentially repay all of its debt by selling 15% of its BTC at current market prices. <\/p>\n

Bitcoin through shares<\/h2>\n

Executive Chairman Michael Saylor’s 46.8% voting share guarantees continuation of the Bitcoin-first strategy, and he asserts even a decline in Bitcoin’s price wouldn’t lead to a selloff.<\/p>\n

Strategy’s equity and debt offering-based fund conversion strategy\u2014using stock and note issuance to purchase BTC has been referred to as an “infinite money glitch.” <\/em>Strategy purchases additional Bitcoin by issuing stock and notes at a premium, driving both BTC and MSTR’s stock upward. <\/p>\n

This model relies on investor faith and sustained appreciation of Bitcoin. Any extended decline in Bitcoin’s price may test its capacity to raise capital or service its obligations.<\/p>\n

Critics point to centralization risks, possible tax burdens on $18 billion of unrealized gains, and regulatory attention from organizations such as the SEC. At the same time, the stock of the company experienced a 336% jump in 2024, although it dropped by 55% from a high of $543 in November to $250 by February 2025.<\/p>\n

In summary, Strategy’s aggressive Bitcoin approach continues to provide returns but with high risk of exposure to market volatility, debt risk, and regulatory issues. Its success will depend on Bitcoin’s long-term trend and Saylor’s dogged adherence to the “never sell” mantra.<\/p>\n","protected":false},"excerpt":{"rendered":"

The post Can Strategy Survive a Bitcoin Crash? The Company\u2019s Risky Capital Model Under Scrutiny appeared first on Coinpedia Fintech News MicroStrategy Incorporated, recently renamed as Strategy, is the largest<\/p>\n

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