🌀 Bitcoin and the “Death Spiral”: The Risk of Debt-Fueled Growth

In 2025, many publicly traded companies began aggressively accumulating Bitcoin, aiming to boost their stock prices and attract investor interest. Often, this is done using debt, following the MicroStrategy model—companies issue bonds or take out loans to build up their crypto reserves.

Experts from the venture firm Breed warn:

📉 If the price of #BTC drops, these companies risk entering a "debt death spiral"—meaning they may be unable to service their debt and face the threat of bankruptcy.

💥 This is especially dangerous for small or unprofitable companies where #Bitcoin has become the main asset on the balance sheet.

The key risk is a bear market. If it materializes, the debt-based Bitcoin acquisition model could become an existential threat to such companies. $BTC

However, Breed estimates the systemic risk remains low, as most companies currently rely on equity-based funding rather than heavy debt.