MicroStrategy, the business intelligence firm co-founded by Bitcoin bull Michael Saylor, has significantly ramped up its Bitcoin acquisition strategy, surpassing 400,000 BTC in holdings.
However, concerns about the company’s financial stability tied to the Bitcoin price have emerged, particularly from Ki Young Ju, CEO of CryptoQuant. Ju cautioned that while the prospect of MicroStrategy facing bankruptcy is not impossible, it would require an event as unlikely as “an asteroid hitting Earth.”
MicroStrategy’s Financial Risks As Bitcoin Price Floor Holds At $30,000
In a recent post on X (formerly Twitter), Ju elaborated on the matter by stating that BTC has maintained a consistent price floor, never dropping below the long-term cost basis of major holders, which currently stands at $30,000. He noted:
MicroStrategy’s debt is $7 billion, while its Bitcoin holdings are valued at $46 billion. Based solely on Bitcoin, the liquidation price would be around $16,500. The last cycle’s bottom was at $16,000. Talking about a drop to that level now feels as improbable as predicting $3,000 when Bitcoin was at $60,000.
In the context of current price movements, CryptoQuant noted that the price surge toward BTC’s new all-time high above $108,000 on Tuesday was fueled by short liquidations totaling approximately $151 million over the past 12 hours,
The firm disclosed that the Bitcoin-to-gold ratio also reached an all-time high during this surge, reinforcing Bitcoin’s reputation as “digital gold” and affirming its role as a preferred store of value compared to traditional gold assets.
Additionally, MicroStrategy’s recent inclusion in the Nasdaq 100 has bolstered market sentiment. Saylor hinted at further Bitcoin purchases, even with spot prices exceeding $100,000.
CryptoQuant asserts that this inclusion could lead to passive fund inflows into MicroStrategy shares, providing the company with greater access to capital for its Bitcoin acquisitions.
BTC Purchases For Sixth Consecutive Weeks
Saylor stated on Monday that Microstrategy has purchased the market’s leading crypto for the sixth week in a row. This transaction adds to the firm’s considerable Bitcoin portfolio, which currently stands at 439,000 BTC, acquired for around $27.1 billion at an average price of $61,725 per coin.
Additionally, Saylor revealed that the firm’s Bitcoin assets have produced significant gains, with a 46.4% increase quarter-to-date (QTD) and a 72.4% gain year-to-date (YTD).
CryptoQuant also noted that this week’s central bank meetings appear to be secondary to market sentiment surrounding Bitcoin. While it remains highly unlikely, an “extremely dovish stance” from the Federal Reserve and Chairman Jerome Powell could provide the necessary momentum for BTC to rise even further.
At the time of writing, BTC is trading at $104,140, down 2.6% on the 24-hour time frame but still up 6.5% on the week.
Featured image from DALL-E, chart from TradingView.com