Bitcoin Updates Today: MicroStrategy Faces a Bitcoin Conundrum: Should They Retain for Future Gains or Liquidate to Stay Afloat?

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Bitget-RWA2025/11/22 21:34

By:Bitget-RWA

- MicroStrategy's stock hits 52-week low as Bitcoin dips below $88,000, testing its BTC treasury strategy's viability. - 650,000 BTC holdings now "underwater" at $74k average cost, limiting capital raises and straining liquidity instruments. - Preferred shares (STRD/STRK) fall 30-34% as market demands higher yields, while JPMorgan warns of $8.8B outflow risk from index exclusion. - CEO Saylor claims 80% BTC drop tolerance, but critics fear forced sales could trigger self-fulfilling price declines. - Weak c

Bitcoin’s recent dip below $88,000 has sent MicroStrategy’s stock tumbling to its lowest point in a year, putting the company’s much-debated

Bitcoin

treasury approach to the test.

MSTR

shares dropped to $173.55 this week, closely tracking Bitcoin’s fall and sparking renewed doubts about the sustainability of its financing strategy. The stock has plunged 40% in 2025 and over 62% over the past year, now hovering at prices last seen during the dotcom era. Analysts caution that MicroStrategy’s financial products are facing mounting strain

according to blockonomi.com

With MicroStrategy now holding 650,000 Bitcoins, the company’s massive crypto reserves have become both an asset and a liability. CEO Michael Saylor has

described the company as a "structured finance enterprise"

using Bitcoin as a productive asset, but with BTC trading below the firm’s average purchase price of $74,000, its treasury is “largely underwater.” This situation has limited MicroStrategy’s ability to raise funds through stock sales, as its fully diluted market capitalization is now just 0.98 times the net value of its Bitcoin holdings

according to blockonomi.com

The pressure is also evident in MicroStrategy’s preferred shares, which have dropped significantly from their previous highs near $100.

STRD

is now at $66,

STRK

trades at $75, and STRF sits at $95.08, showing that investors are demanding higher returns as risks grow. These securities, originally intended to finance additional Bitcoin acquisitions, have instead become a burden on the company’s liquidity.

JPMorgan analysts noted

that MicroStrategy’s leveraged position has intensified its losses, with MSTR’s decline outpacing that of Bitcoin itself.

Bitcoin Updates Today: MicroStrategy Faces a Bitcoin Conundrum: Should They Retain for Future Gains or Liquidate to Stay Afloat? image 0

Saylor has attempted to calm shareholders, asserting that the company could survive a Bitcoin plunge of up to 80%. "

We are positioned to hold through a BTC drop of up to 80%

," he claimed. Still, skeptics warn that if MicroStrategy is forced to sell Bitcoin to cover its debts, it could trigger a downward spiral, pushing prices even lower and further damaging the company’s value.

Adding to the difficulties,

JPMorgan warned

that MicroStrategy could be removed from major indices such as MSCI, potentially causing up to $8.8 billion in capital outflows. The bank pointed out that $9 billion of MicroStrategy’s market value is currently held by passive funds tracking these benchmarks. Being dropped from the indices would not only reduce liquidity but also cast doubt on the company’s ability to secure future funding.

The “18-month test” referenced in the headline is now a critical challenge. MicroStrategy’s plan hinges on accumulating Bitcoin for the long haul, but current market conditions—characterized by weak crypto liquidity and regulatory headwinds—threaten this strategy. With Bitcoin hovering near key support and MicroStrategy’s financial model under stress, the next several months will be crucial in determining whether the company can survive the turbulence or face a major reckoning.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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