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Strategy (formerly known as MicroStrategy) is the largest holder of Bitcoin, holding 671,268 BTC, representing more than 3.2% of the total Bitcoin in circulation. This makes the company a high risk base of the Bitcoin ecosystem.
If it collapses, the impact could be greater than the FTX collapse in 2022. Here’s why this threat is real, what it could spread, and how bad the consequences could be.
MicroStrategy is a leveraged Bitcoin bet
Identity Complete micro strategy Now linked to Bitcoin. The company spent more than $50 billion buying Bitcoin (BTC), mostly using debt and equity sales. Its software business alone generates $460 million a year, a fraction of its exposure.
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Until December 2025, Its stock trades much lower of the value of their stake in Bitcoin. The market capitalization is about $45 billion, but its Bitcoin value is between $59-60 billion.
Investors discount their assets due to concerns about dilution, debt and sustainability.
The average cost of the underlying Bitcoin is about $74,972, and most of the recent purchases have been near the Bitcoin peak in Q4 2025.
More than 95% of its valuation is based on the price of Bitcoin.
if Its BTC currency dropped sharplyThe company may fall into bankruptcy – holding billions of dollars in debt and preferred stock with no way out.
For example, Bitcoin has fallen by 20% since October 10, but The loss of MSTR is more than double In the same period.
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What is a danger to a black swan?
MicroStrategy used aggressive tactics to fund Bitcoin purchases. It sold common stock and issued new types of preferred stock.
You are doomed now With more than $8.2 billion in convertible debt It has more than $7.5 billion in preferred stock. These financial instruments require significant cash flow: $779 million a year in interest and dividends.
At current levels, if Bitcoin collapses below $13,000, MicroStrategy could now be bankrupt. This is unlikely in the short term, but the history of Bitcoin shows that declines of 70-80% are common.
A major crash, especially if combined with a liquidity crunch or ETF-driven volatility, could push a company into distress.
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Unlike FTXMicroStrategy is not an exchange. But the impact of its failure may be more profound. It owns more Bitcoin than any other entity except some ETFs and governments.
A forced liquidation or panic over a collapse of MicroStrategy could cause the price of Bitcoin to fall sharply – creating a feedback loop in the cryptocurrency markets.
MicroStrategy has promised not to sell its BitcoinBut that depends on their ability to raise money.
Until the end of 2025, It has $2.2 billion in reserves. This is enough to cover two years of payments. But this margin may disappear if Bitcoin declines and capital markets close.
How likely is Michael Saylor’s strategy to fail?
Probability is not binary. But the risk increases.
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MicroStrategy’s current situation is fragile. Its stock is down 50% this year. The mNAV value is less than 0.8×. Institutional investors are turning to Bitcoin ETFs, which are cheaper and less complex.
Index funds can lower their MSTR because of their structure, resulting in billions of dollars in negative flows.
If Bitcoin falls below $50,000 and stays there, the company’s market capitalization could fall below its debt. At that point, their ability to raise capital can dry up – forcing painful decisions, including asset sales or restructuring.
The probability of a complete collapse in 2026 is low, but not far off. A rough estimate could put the probability between 10-20%, based on the current balance sheet risk, market behavior and Bitcoin volatility.
But if that happens, the damage could go beyond that I would have FTX. FTX was a centralized exchange. MicroStrategy is the primary holder of the Bitcoin offering.
If their holdings flood the market, the price and trust of Bitcoin could be severely affected. This can lead to an increase in transactions via digital currencies.
