Share this article
MicroStrategy Only Needs to Liquidate Bitcoin in Extreme Price Corrections: Bernstein
A more robust bitcoin price means the company has a stronger balance sheet, a higher share price and easier debt repayment without the need to sell down its cryptocurrency holdings, the report said.
Updated Jul 12, 2023, 8:58 a.m. Published Jul 12, 2023, 8:58 a.m.
MicroStrategy’s (MSTR) plan to raise long term debt puts it under pressure to liquidate its bitcoin holdings, but only in case of extreme price corrections, especially around its debt expiry which is due in mid-2025, broker Bernstein said in a report Tuesday.
Higher bitcoin prices means MicroStrategy has a stronger balance sheet, a higher share price and easier debt repayment without the need to sell down its cryptocurrency holdings, the report said. Furthermore, strong bitcoin prices and a higher stock price, allows the company to raise new debt or equity and to redeem existing convertible notes, the broker said.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Conversely, if bitcoin crashes and reaches “absolute depressed prices” and the value of MicroStrategy’s cryptocurrency holdings do not cover debt and certain covenants post June 2025, the “corporate structure would come under pressure from ‘spring forward’ clauses - 2028 due debt does have liquidity covenants which could spring forward the debt to 2025/26”, the report added.
“Given bitcoin’s volatility, using debt as a strategy is always precarious, and one-off forced liquidations can never be ruled out completely,” analysts led by Gautam Chhugani wrote.
MicroStrategy holds around 152,000 bitcoin, with a total cost basis of about $4.5 billion, and an average price of roughly $29,600, the note said. The market value of MicroStrategy’s cryptocurrency assets form about 0.78% of the total bitcoin in supply and account for around 20% of daily average BTC trading volume, the analysts wrote.
The market value of bitcoin assets form 95% of the market capitalization of MicroStrategy and net of debt raised to buy BTC, equate to about 49% of the market cap of the company, the report added.
MicroStrategy’s ability to refinance its debt maturities would be greatly enhanced if its share price, and the value of its bitcoin holdings, were to increase meaningfully, investment bank Berenberg said in a report on Monday.
Read more: Michael Saylor’s MicroStrategy Can See Substantial Gains From Bitcoin’s Next Halving: Berenberg
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Foundation behind restaking protocol EigenLayer plans bigger rewards for active users
An Incentives Committee would direct programmatic token emissions, focusing allocations on participants that secure AVSs and contribute to the EigenCloud ecosystem.
What to know:
- The Eigen Foundation has unveiled a governance proposal aimed at ushering in new incentives for its EIGEN token, shifting the protocol’s reward strategy to prioritize productive network activity and fee generation.
- Under the plan, a newly formed Incentives Committee would manage token emissions, prioritizing participants who secure Actively Validated Services and expand the EigenCloud ecosystem.
- The proposal includes a fee model that channels revenue from AVS rewards and EigenCloud services back to EIGEN holders, potentially creating deflationary pressure as the ecosystem grows.
Top Stories
