Bitcoin Must Fall 90% For Years To Pressure | Crypto News
Strategy’s management is pushing back against growing issues that the world’s largest company holder of Bitcoin (BTC) might face severe financial stress as the cryptocurrency’s price continues to slide.
Speaking after the company launched its fourth‑quarter outcomes, CEO Phong Le sought to reassure buyers that the firm stays well-positioned, even as Bitcoin fell close to $60,000 on Thursday.
Bitcoin Sell‑Off Tests Strategy’s Financial Resilience
Bitcoin dropped roughly 50% since reaching all‑time highs of $126,000 in October of last yr, a period during which Strategy, previously identified as MicroStrategy, was aggressively accumulating the digital asset.
The promote‑off has weighed closely on the company’s share price. Strategy’s stock, trading under the ticker MSTR, sank to about $104 on Thursday, its lowest stage since August 2024, after plunging more than 17% during the session.
For now, buyers are centered on two key elements: the price of Bitcoin itself and Strategy’s means to meet its financial obligations if the downturn deepens. Those questions loomed large as founder Michael Saylor and CEO Phong Le addressed analysts during the firm’s earnings call.
Much of the eye centered on how Strategy would navigate a extended “Bitcoin winter,” ought to one materialize. Saylor has already taken steps to bolster the company’s financial flexibility, including raising a $2.25 billion money reserve to cowl most popular dividend funds totaling $888 million yearly.
However, buyers stay uneasy about the company’s $8.2 billion in low‑ and zero‑curiosity convertible bonds, which might start going through early redemptions beginning in September 2027, significantly now that MSTR shares have fallen sharply.
Politics, Leverage, And Valuation In Focus
Saylor reiterated that the company is preserving its choices open, including the chance of promoting Bitcoin if market circumstances require it.
He also framed crypto investing as inseparable from politics, pointing to President Donald Trump’s professional‑crypto stance and noting that Trump’s nominee for Federal Reserve (Fed) chair, Kevin Warsh, is seen as supportive of digital property.
Still, Bitcoin fell through its post‑2024 election lows on Thursday, reflecting skepticism that the federal authorities will actively help Bitcoin purchases. Treasury Secretary Scott Bessent bolstered those doubts this week, telling Congress he lacks the authority to rescue Bitcoin markets.
On the stability‑sheet entrance, CEO Phong Le addressed worries about Strategy’s leverage. He said the company operates with roughly one‑third the leverage of a typical high‑yield firm.
According to Le, Bitcoin would need to decline by about 90% for Strategy’s Bitcoin reserves to merely equal the worth of its convertible debt. Even in that excessive situation, he said, the company would explore restructuring choices if it couldn’t convert the debt into equity.
Strategy’s own disclosures show an enterprise worth of about $49.95 billion, in contrast with roughly $45.33 billion price of Bitcoin on its stability sheet. Enterprise worth contains the company’s market capitalization, most popular shares, and convertible bonds, minus money.
If Bitcoin drops once again close to $63,000, Strategy’s market cap of $35.57 billion would need to fall about 13% from its latest closing price of $106.99 to eradicate the valuation premium over its Bitcoin holdings.
However, since Thursday’s crash, both Bitcoin and Strategy’s stock have made a vital recovery. Bitcoin, for instance, has surged to around $69,256. MSTR has recovered above $130, marking a 20% increase in less than 24 hours and offering short-term aid.
Featured image from OpenArt, chart from TradingView.com
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