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coinpedia 2025-02-26 07:37:16

MSTR Plummets 55%; MicroStrategy’s $43.7B Bitcoin at Risk of Being Sold?

The post MSTR Plummets 55%; MicroStrategy’s $43.7B Bitcoin at Risk of Being Sold? appeared first on Coinpedia Fintech News Michael Saylor’s company, formerly known as MicroStrategy, is going through a tough financial period. Its stock has dropped more than 55% since the start of the year. This has sparked concerns about whether the company might have to sell off its large Bitcoin holdings to stay afloat. The firm holds around 499,096 BTC, valued at $43.7 billion, with an average Bitcoin purchase price of $66,350. If Bitcoin’s price drops below that average, MicroStrategy could be forced to sell some of its Bitcoin to cover its debt. https://twitter.com/KobeissiLetter/status/1894444656483533187 However, an analysis from The Kobeissi Letter suggests this is unlikely to happen. MicroStrategy’s strategy involves borrowing money with low-interest notes, buying Bitcoin to push its price up, selling shares, and then buying more Bitcoin. Even with Bitcoin recently dropping to $86,008, the company’s strategy helps reduce the risk of a big sell-off. According to The Kobeissi Letter, MicroStrategy would need Bitcoin to drop below $66,000 and stay there to be forced to sell its holdings. Despite several Bitcoin price crashes since August 2020, the company has never sold its Bitcoin and has managed to stay stable. The company holds $8.2 billion in debt backed by $43.4 billion in Bitcoin. Most of its convertible notes are due by 2027, giving the firm time to wait for the price to recover from any declines, protecting it from short-term risks. Geoff Kendrick from Standard Chartered has forecasted a potential 10% drop, linking it to outflows from U.S. Bitcoin spot ETFs. While analysts like BitMEX co-founder Arthur Hayes also predict more price drops, the overall outlook for Bitcoin remains positive.

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