As the Bitcoin market faced turmoil surrounding the possible bankruptcy of Genesis Trading and Digital Currency Group (DCG), chatter kept surfacing that Michael Saylor’s and MicroStrategy’s Bitcoin bet could be in jeopardy if the price continues to fall.
This elephant in the room has been investigated by Will Clemente of Reflexivity Research and Sam Martin of Blockworks Research. In their report, they examine the questions of whether MicroStrategy has a Bitcoin liquidation price, how high it is, and how the company’s debt is structured.
MicroStrategy has the largest Bitcoin holdings among exchange-listed companies, amounting to 130,000 BTC. In the past, the company even took out new loans to grow its Bitcoin holdings.
Specifically, MicroStrategy borrowed $2.37 billion to buy its Bitcoin at an average price of about $30,000 per BTC. The debt profile of Saylor’s company can be found in the table below.
Is MicroStrategy And Saylor’s Levered Bitcoin Bet At Risk?
The convertible notes incur minimal interest costs for MicroStrategy, according to the research report, because the notes were issued at very favorable MSTR conversion rates.
In addition, conversion to stock cannot occur until June 15, 2025, and August 15, 2026, at the earliest, unless the company undergoes a…
