STRATEGY, THE COMPANY FORMERLY KNOWN AS MICROSTRATEGY, IS CONFRONTING MOUNTING FINANCIAL PRESSURES AS ITS MASSIVE BITCOIN HOLDINGS AND AGGRESSIVE DEBT STRUCTURE EXPOSE THE FIRM TO SIGNIFICANT COLLAPSE RISKS, WITH ANALYSTS WARNING OF POTENTIALLY CATASTROPHIC MARKET CONSEQUENCES IF THE COMPANY FAILS.
THE TYSONS CORNER, VIRGINIA-BASED FIRM HOLDS 671,268 BITCOIN—MORE THAN 3.2% OF ALL BITCOIN IN CIRCULATION—VALUED AT APPROXIMATELY $59 BILLION AS OF LATE DECEMBER 2025. YET ITS MARKET CAPITALIZATION STANDS AT JUST $45 BILLION, REFLECTING INVESTOR CONCERNS ABOUT THE COMPANY'S $8.2 BILLION IN CONVERTIBLE DEBT, $7.5 BILLION IN PREFERRED STOCK, AND $779 MILLION IN ANNUAL INTEREST AND DIVIDEND OBLIGATIONS.
WITH BITCOIN TRADING AROUND $87,300 ON DECEMBER 27 AND STRATEGY'S AVERAGE ACQUISITION COST AT APPROXIMATELY $74,972 PER COIN, THE COMPANY MAINTAINS A NARROW BUFFER. STRATEGY'S STOCK HAS PLUMMETED ROUGHLY 50% SINCE OCTOBER, WHEN BITCOIN PEAKED NEAR $126,000.
THE COMPANY FACES AN IMMINENT THREAT FROM MSCI, THE INFLUENTIAL INDEX PROVIDER, WHICH IS CONSIDERING EXCLUDING STRATEGY AND OTHER "DIGITAL ASSET TREASURY" COMPANIES FROM ITS GLOBAL BENCHMARKS. MSCI WILL ANNOUNCE ITS DECISION ON JANUARY 15, 2026.
JPMORGAN ESTIMATES THAT MSCI EXCLUSION ALONE COULD TRIGGER $2.8 BILLION IN FORCED OUTFLOWS FROM PASSIVE FUNDS, POTENTIALLY RISING TO $8.8 BILLION IF OTHER INDEX PROVIDERS FOLLOW SUIT. STRATEGY CEO PHONG LE AND EXECUTIVE CHAIRMAN MICHAEL SAYLOR WARNED IN A LETTER TO MSCI THAT SUCH EXCLUSION WOULD "DEPRIVE THESE COMPANIES OF ABOUT $15 TRILLION IN PASSIVE INVESTMENTS" AND "CHILL" THE INDUSTRY.
IN RESPONSE TO THE CRISIS, STRATEGY HAS SHIFTED TO DEFENSIVE MODE. THE COMPANY RAISED ITS CASH RESERVES TO $2.19 BILLION AS OF DECEMBER 21 AND PAUSED BITCOIN PURCHASES FOR THE FIRST TIME IN MONTHS. "ESTABLISHING A USD RESERVE TO COMPLEMENT OUR BTC RESERVE MARKS THE NEXT STEP IN OUR EVOLUTION," SAYLOR STATED.
MULTIPLE ANALYSTS HAVE COMPARED STRATEGY'S POTENTIAL COLLAPSE TO FTX'S 2022 IMPLOSION, WITH SOME WARNING THE CONSEQUENCES COULD BE WORSE. "UNLIKE FTX, WHICH WAS AN EXCHANGE, MICROSTRATEGY IS A CRUCIAL HOLDER OF BITCOIN'S SUPPLY," ACCORDING TO ANALYSIS FROM BEINCRYPTO. A FORCED LIQUIDATION COULD SEVERELY IMPACT BITCOIN'S PRICE AND TRIGGER A CASCADING EFFECT THROUGHOUT CRYPTOCURRENCY MARKETS.
ANALYSTS ESTIMATE A 10–20% PROBABILITY OF STRATEGY'S COLLAPSE BY 2026 IF BITCOIN EXPERIENCES A PROLONGED DOWNTURN. THE COMPANY COULD FACE INSOLVENCY IF BITCOIN DROPS BELOW $13,000, THOUGH SUCH A SCENARIO IS NOT CONSIDERED IMMINENT.
"WE CAN SELL BITCOIN AND WE WOULD SELL BITCOIN IF WE NEEDED TO FUND OUR DIVIDEND PAYMENTS BELOW 1X MNAV," CEO LE ACKNOWLEDGED IN A DECEMBER PODCAST—A REMARKABLE ADMISSION FOR A COMPANY BUILT ON THE PREMISE OF INDEFINITELY HOLDING BITCOIN. AS OF DECEMBER 23, STRATEGY'S MARKET-IMPLIED NET ASSET VALUE STOOD AT APPROXIMATELY 1.1.
DESPITE THE MOUNTING PRESSURES, SAYLOR HAS MAINTAINED HIS CHARACTERISTICALLY BULLISH STANCE. IN A RECENT PODCAST APPEARANCE, HE PREDICTED BITCOIN COULD REACH $1 MILLION PER COIN WHEN STRATEGY ACQUIRES 5% OF BITCOIN'S TOTAL SUPPLY, AND $10 MILLION WHEN IT REACHES 7%.
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