Strategy Executive Chairman Michael Saylor on Tuesday said he is not concerned about further declines in Bitcoin prices, claiming that it can withstand an 80%–90% drawdown and keep operating.
Saylor said [Bitcoin] has endured “15 major drawdowns” and repeatedly returned to new all-time highs, arguing that the current downturn is consistent with past patterns.
“If you zoom out, this is just par for the course,” he said. “It’s a healthy thing. It clears out the tourists, the leverage, and the weak holders.”
Asked whether Wall Street’s entry into the market was supposed to reduce volatility, Saylor said Bitcoin’s volatility has already been declining over time.
When he entered the sector in 2020, he noted, Bitcoin behaved like an “80-vol asset,” but has gradually compressed into something closer to a “50-vol asset growing about 50% a year.”
Saylor rejected concerns that MicroStrategy’s strategy could come under pressure during a prolonged downturn.
He said the company remains “the best-capitalized in the crypto economy,” citing more than $50 billion in equity value and liquid credit instruments.
MicroStrategy’s financing model, raising capital through equity or credit to buy Bitcoin, remains viable, he said, as long as Bitcoin’s long-term appreciation continues.
The company, he added, is engineered to survive extreme stress. “As long as Bitcoin goes up 1.25% a year, the company can pay the dividend forever,” he said.
Even in a scenario where Bitcoin does not appreciate, he estimated MicroStrategy would have “about 80 years to figure out” adjustments.
Saylor dismissed downside risk as existential, saying the firm’s balance sheet can handle severe shocks.
“The company is engineered to take an 80% to 90% drawdown and keep on ticking,” he said, describing its leverage as “extremely robust.”
MicroStrategy’s exposure to Bitcoin remains significant. The company controls roughly 649,870 BTC, valued at about $59.6 billion at publication time, per data from SaylorTracker, making it the largest corporate holder of the asset by a wide margin.
Despite Saylor’s confidence, some market indicators tied to the company have softened.
MicroStrategy’s modified net asset value (mNAV) multiple has declined to about 1.11x, down from roughly 1.52x when Bitcoin reached its record high of $125,100 on Oct. 5.
MicroStrategy shares also continue to move in tandem with Bitcoin’s downturn.
The stock finished Tuesday at $206.80, marking an 11.5% decline over the past week, according to Google Finance. The company’s equity often trades either above or below its implied Bitcoin value depending on market sentiment, and the recent slide has pushed the stock toward the lower end of that range.