As Bitcoin volatility continues to pressure crypto-linked equities, a growing narrative has emerged questioning whether Michael Saylor’s company, Strategy, could face bankruptcy or be forced to sell Bitcoin if the price falls to $74,000.
A review of Strategy’s balance sheet, debt structure and recent executive disclosures suggests that scenario is not supported by the company’s financial position.
Strategy’s Balance Sheet Shows No Insolvency Risk At $74,000 Bitcoin
Strategy now operates primarily as a Bitcoin-holding company rather than a leveraged trading vehicle.
The firm holds 672,497 Bitcoin, valued at roughly $59 billion at current prices, while total debt stands at about $8.2 billion, according to public filings.
If Bitcoin were to fall to $74,000, the value of Strategy’s Bitcoin holdings would decline to approximately $49.8 billion.
Even at that level, the company’s digital asset holdings would remain well above its liabilities, meaning such a price move would not result in insolvency.
Importantly, Strategy’s Bitcoin is not pledged as collateral, and the company does not use margin-based borrowing.
Its debt consists largely of unsecured convertible notes, which do not include liquidation triggers tied to Bitcoin’s price.
As a result, a drop to $74,000 would affect asset valuation but would not force asset sales or trigger margin calls.
Liquidity Reserves Reduce Near-Term Pressure To Sell Bitcoin
Concerns that Strategy could be forced to sell Bitcoin to meet short-term obligations are also not supported by disclosed liquidity data.
The company has set aside roughly $2.2 billion in U.S. dollar reserves, which it says is sufficient to cover approximately 32 months of interest and preferred dividend payments.
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Annual interest and dividend obligations are estimated at $750 million to $800 million, and the company does not face any major debt maturities until 2028.
Strategy’s software business continues to generate revenue, providing an additional source of operating cash flow.
These factors prompted Matt Hougan, chief investment officer at Bitwise, to publicly dismiss bankruptcy concerns, saying such claims do not “survive contact with the numbers.”
Why The Stock Fell Despite A Stable Capital Structure
Strategy’s shares have fallen roughly 66% over the past six months, erasing nearly $90 billion in market capitalization, even as the company’s Bitcoin holdings remain worth more than its current equity value.
The stock is now trading at an estimated 20%–25% discount to the net value of its Bitcoin after accounting for debt.
The decline reflects a combination of factors beyond Bitcoin’s price move.
These include repeated share issuance to fund additional Bitcoin purchases, concerns about potential index exclusions if new rules are adopted, higher margin requirements imposed by banks on Strategy shares, and increased short interest tied to “long Bitcoin, short Strategy” trades.
In a November interview, Strategy Chief Executive Phong Le said the company would consider selling Bitcoin only under extreme conditions, including prolonged trading below net asset value, exhausted financing options and the need to meet preferred dividend obligations.
He emphasized that selling Bitcoin would be a last resort and that the company does not want to become “the company that sells Bitcoin.”
For now, a move to $74,000 Bitcoin would weigh on sentiment and valuation, but it would not, on its own, force Strategy into bankruptcy or trigger mandatory Bitcoin sales.
The current debate reflects market structure pressures and investor positioning rather than a breakdown in the company’s financial foundation.
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