Who falls first in the trillion dollar gamble? Bitcoin or MicroStrategy?
The war between Bitcoin and MicroStrategy is heating up. The company’s entire strategy, and perhaps its existence, is tied to Bitcoin’s unpredictable market. With a trillion dollars on the line, the stakes couldn’t be higher.
MicroStrategy has dumped $25.6 billion into Bitcoin since 2020, scooping up 423,650 BTC at an average price of $60,324 per coin. The company, once known for its software, now holds 2% of all Bitcoin in circulation.
With Bitcoin trading at over $100,000 this week, those holdings are worth $42 billion. Michael Saylor, MicroStrategy’s co-founder and executive chairman, has become Bitcoin’s loudest megaphone. His “21/21 Plan” outlines a strategy to raise $42 billion—half through debt and half through equity—to buy more Bitcoin.
According to Saylor, Bitcoin is the future of corporate finance. He’s even predicting it could hit $13 million per coin by 2045. The confidence is through the roof, but so is the company’s exposure.
The company’s stock price has skyrocketed by 540% this year, catapulting its market valuation from $1.1 billion in 2020 to $83 billion.
But this is where the cracks start to show. MicroStrategy’s success hinges entirely on Bitcoin’s price. If Bitcoin stumbles, MicroStrategy stumbles harder.
Analysts warn that if Bitcoin dips below $30,000, the company could be forced to sell parts of its Bitcoin holdings to cover debts. This could trigger a domino effect, sending Bitcoin’s price even lower and deepening MicroStrategy’s troubles.
The company is also dealing with $8 billion in convertible notes due over the next few years. These notes are essentially IOUs, and paying them off depends on Bitcoin maintaining its high value. If the market cools, the company could face a financial nightmare.
