"If Bitcoin prices drop 22% below the average purchase price, they may become forced sellers," he wrote, referring to the collapse of Core Scientific in 2022 as a precedent. At that time, the miner sold thousands of BTC when prices fell just 22% below his cash costs.

MicroStrategy (NASDAQ:MSTR), which has pioneered the corporate treasury model for Bitcoin, holds the majority of these reserves — 86% of the total — and has a much lower average purchase price of $70,000.

However, new participants are at greater risk. "Their assets have doubled over the past two months to just under 100,000 BTC, and their average purchase prices are higher in most cases than those of MSTR," Kendrick notes.