"Selling kidneys must keep Bitcoin", Strategy's long bet is subject to liquidation concerns

Author:Nancy , PANews

"Sell a kidney if necessary, but keep Bitcoin." This seemingly joking joke in the latest tweet of Michael Saylor, founder of Strategy (formerly MicroStrategy), is a strong belief in the long-term value of Bitcoin.

In recent times, Bitcoin has led the crypto market to fall across the board, and the pessimistic liquidity outlook has intensified the market's selling sentiment. In this market environment, investors can't help but worry that MicroStrategy, a veteran Bitcoin leverage, will encounter a "turnover".

When bulls encounter cold waves, **what are the risks of

liquidation?**

Bitcoin super long Strategy is facing the dual pressure of profit retracement and stock price decline.

MSTR-tracker data shows that as of February 28, Strategy held a total of 499,096 Bitcoins, with a total purchase cost of nearly US$33.12 billion, and an average purchase price of approximately US$66,357. The current total value of Bitcoin holdings is US$39.57 billion. Compared with Strategy's up to nearly $20 billion in Bitcoin holdings in previous months, it has now dropped to $6.45 billion.

While the floating profits were retracing sharply, Strategy's stock price continued to fall. Google Finance shows that as of February 28, Strategy's stock price fell by more than 39.4% from this year's high of $396.5 this year. The market has also raised concerns that the "bitcoin treasury" company may be forced to liquidate its Bitcoin holdings. As crypto analyst Miles Deutscher pointed out, Strategy's market value has a premium rate of 1.6 times relative to its Bitcoin assets held from 3.4 times in November last year to 1.6 times now. The lower this number, the more difficult it will be for Michael Saylor to raise more money for buying Bitcoin, which means its pace of buying Bitcoin may slow down.

However, analytical agency The Kobeissi Letter believes that this situation is "almost impossible". The reason is that the structural design of Strategy's convertible notes, the company's previous ability to raise $1.8 billion in equity during the decline in Bitcoin, and Michael Saylor's 46.8% voting rights together constitute a strong guarantee for preventing forced liquidation. Even if Bitcoin price drops 50% to $33,000, Strategy's assets will still exceed more than 100% of its debt.

Currently, Strategy has a total of US$9.26 billion in unsecured debt. According to Strategy's official website, the company has six outstanding convertible bonds, most of which are issued at extremely low interest rates, and the maturity dates are all after 2028. The latest debt is due in June 2032. Even if two of the largest bonds total $5 billion, accounting for more than half of the total debt, and the market price of their convertible bonds is lower than the issue price, it may increase market concerns about these debts, but these debts will not mature until the end of 2029, and Strategy has enough time to deal with and adjust. What's more, the Bitcoin held by Strategy itself is not directly collateralized as collateral for the loan, and its funds mainly come from external investors. To some extent, Strategy's convertible bond structure and financing capabilities reduce the likelihood of its Bitcoin being forced to be collateralized or liquidated.

In addition, judging from the stock holdings of Strategy, it not only demonstrates the high recognition and confidence of Strategy by large institutional investors, but also brings stronger market credibility and capital support to it. Fintel data shows that Strategy has 1,403 institutional owners and shareholders, such as Susquehanna International Group, Vanguard Group, IMC-Chicago, Citadel Advisors, Jane Street Group, Capital International and BlackRock.

Continue to be bullish against the market, and **the target of 2025

is to lock in 10 billion yuan in profits**

Although the crypto market has encountered a cold wave, Michael Saylor is still firmly bullish, and even continued to increase his position when Bitcoin fell.

In recent public occasions, Michael Saylor reiterated that Bitcoin is becoming the "world reserve capital network", superior to real estate and stocks, and is a digital capital worth long-term holding. He predicts that the current $2 trillion market value of the Bitcoin network will grow to $20 trillion in the next 4 to 8 years, surpassing the growth rate of other assets around the world, and said that "volatility is a gift for loyalists." Saylor even said that he would donate his personal shares to public charities that support Bitcoin after his death in the future, which also demonstrates his deep belief in Bitcoin.

"From selling software to selling Bitcoin, Saylor's orange empire has taken shape." To emphasize the crypto-centric business, Strategy has also rebranded not long ago. In early February this year, Strategy said in an announcement that as the world's first and largest Bitcoin finance company, this brand simplification is a natural evolution of the company, reflecting the company's focus and wide appeal. The new logo includes a stylized “B” that represents the company’s Bitcoin strategy and its unique position as a Bitcoin finance company. The brand’s main tone is now orange, representing energy, wisdom and Bitcoin. At the same time, Strategy has also launched a new software website strategysoftware.com and a branded product website store.strategy.com.

In the advancement of the crypto industry, Strategy not only launched a Bitcoin Hub co-working place, aiming to attract innovators to promote the development of the Bitcoin ecosystem, but also met with the SEC Crypto Working Group to propose digital asset regulatory framework proposals, trying to establish clear boundaries for the market. In the industry's view, Saylor is not only hoarding Bitcoin, but also shaping industry rules and showing the attitude of long-term players.

It is worth mentioning that Strategy announced the adoption of the latest FASB accounting standards in the first quarter of 2025. If Bitcoin closes above $96,337 in the first quarter, Strategy's positive profitability is expected to meet the criteria for inclusion of the S&P 500. Once implemented, Strategy will further enhance its market influence. In its previously released financial report, Strategy announced that its 2025 Bitcoin earnings target is set at US$10 billion, with an annualized rate of return of 15%.