MicroStrategy has become the largest public holder of Bitcoin, owning 582,000 BTC valued at about $62 billion. This dominance translates to approximately 2.77% of Bitcoin's total supply, making their investment strategy a focal point of debate. Critics are voicing concerns over the risk posed by the company's cyclical strategy, which involves issuing new shares or debt, using the proceeds to purchase Bitcoin, and then announcing those purchases. This cycle has reportedly led them to accumulate an additional 133,850 Bitcoin in just 2025. Now, MicroStrategy has initiated a new $1 billion share sale, potentially diluting shareholder value even further.
A recent virally shared post has drawn comparisons between MicroStrategy's strategy and the collapse of FTX, raising alarms about its sustainability. Furthermore, the company recently disclosed $5.9 billion in unrealized losses due to new accounting rules that require public companies to reveal such figures. As a result, shareholders have launched a class-action lawsuit claiming that MicroStrategy did not adequately inform investors of the associated risks of these accounting changes. With MicroStrategy's average Bitcoin purchase price sitting at $70,000, any drop below this level could exert severe pressure on their balance sheet, with analysts warning that a 22% drop in Bitcoin prices could lead to large-scale liquidations.
Critics emphasize that if MicroStrategy is forced to liquidate its significant Bitcoin holdings, which make up 71% of the total corporate Bitcoin inventory, the wider cryptocurrency market may feel the repercussions. As one observer aptly states, "If you hold Bitcoin, your fate is now partially tied to MicroStrategy's." This situation has sparked intense discussions among investors about MicroStrategy's role in driving Bitcoin prices or whether they are dangerously overextended. With all these factors at play, Bitcoin holders should tread carefully and remain well-informed about market dynamics related to MicroStrategy's bold investment approach.
A recent virally shared post has drawn comparisons between MicroStrategy's strategy and the collapse of FTX, raising alarms about its sustainability. Furthermore, the company recently disclosed $5.9 billion in unrealized losses due to new accounting rules that require public companies to reveal such figures. As a result, shareholders have launched a class-action lawsuit claiming that MicroStrategy did not adequately inform investors of the associated risks of these accounting changes. With MicroStrategy's average Bitcoin purchase price sitting at $70,000, any drop below this level could exert severe pressure on their balance sheet, with analysts warning that a 22% drop in Bitcoin prices could lead to large-scale liquidations.
Critics emphasize that if MicroStrategy is forced to liquidate its significant Bitcoin holdings, which make up 71% of the total corporate Bitcoin inventory, the wider cryptocurrency market may feel the repercussions. As one observer aptly states, "If you hold Bitcoin, your fate is now partially tied to MicroStrategy's." This situation has sparked intense discussions among investors about MicroStrategy's role in driving Bitcoin prices or whether they are dangerously overextended. With all these factors at play, Bitcoin holders should tread carefully and remain well-informed about market dynamics related to MicroStrategy's bold investment approach.
