BEARISH 📉 : Strategy faces financial strain as Bitcoin prices drop sharply

Strategy, the largest corporate holder of Bitcoin, faces scrutiny as Bitcoin's price declines. CEO Phong Le reassures investors of the company's stability despite recent volatility.

Bitcoin Sell-Off and Financial Impact

Bitcoin has dropped roughly 50% from its all-time high of $126,000 in October.
Strategy's stock (MSTR) fell to $104, its lowest since August 2024, after a 17% drop.
Investors are concerned about Bitcoin's price and Strategy's financial obligations amid market downturns.

Founder Michael Saylor has prepared for a potential prolonged "Bitcoin winter" by raising a $2.25 billion cash reserve for dividend payments and managing convertible bonds worth $8.2 billion, facing potential early redemptions by September 2027.

Politics, Leverage, and Valuation

Saylor is open to selling Bitcoin if necessary, considering political factors like pro-crypto stances.
Treasury doubts federal support for Bitcoin; Secretary Bessent says he lacks authority for market rescue.
CEO Phong Le stated the company maintains lower leverage than typical high-yield firms.

Le noted that Bitcoin would need to decline by approximately 90% for reserves to match convertible debt value. In such cases, restructuring options would be considered. Strategy's enterprise value stands at $49.95 billion, higher than its $45.33 billion Bitcoin holdings.

If Bitcoin nears $63,000 again, Strategy's market cap of $35.57 billion would require a 13% decrease to equalize valuation with Bitcoin holdings.

After Thursday's crash, both Bitcoin and Strategy’s stock rebounded significantly. Bitcoin rose to $69,256, and MSTR climbed above $130, marking a 20% recovery within 24 hours.