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Strategy stock falls 11% as Bitcoin slips below $90K, sparking liquidation fears Strategy stock plunged 11% on Feb. 25 as Bitcoin slipped below $90,000, raising concerns about a possible liquidation due to the company’s massive Bitcoin exposure.With 499,096 Bitcoin Bitcoin
btc
-2.74%
Bitcoin valued at around $44 billion, Strategy is the largest corporate Bitcoin holder, making its financial stability closely tied to the asset’s price movements.
The sharp drop has fueled speculation of a possible forced liquidation. However, in a Feb. 25 X post, capital market analysts The Kobeissi Letter noted that these concerns are exaggerated.
Strategy currently holds $8.2 billion in debt against its ~$44 billion in Bitcoin, maintaining a leverage ratio of around 19%. To lower the risk of an immediate default, the majority of this debt is structured as convertible notes with conversion values below the current stock price.
Liquidation-related market panic is not new. Similar worries surfaced during Bitcoin’s 2022 plunge from $70,000 to $15,000, yet Strategy kept buying Bitcoin. The company’s business plan is centered around raising capital, buying Bitcoin, and treating its holdings as assets rather than liabilities.
The MicroStrategy liquidation:
As MicroStrategy, $MSTR, falls over -55%, many are asking about "forced liquidation."
The company now holds $44 BILLION worth of Bitcoin, could they be forced to sell it?
