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MicroStrategy (Strategy) has published its Q4 2025 earnings report, revealing with the report a strong bearish scenario that could begin to put pressure on its Bitcoin treasury model.
The CEO’s comments revealed a rare insight into how far the market can fall before a company’s capital structure comes under serious pressure.
MicroStrategy finally reveals what will be its breakeven point as the price of Bitcoin decreases
During a recent earnings call, MicroStrategy CEO Fong Lee said that a 90% decline in Bitcoin to settle at around $8,000 would mark the point at which the company’s Bitcoin reserves become nearly equal to its net debt.
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At that level, the company will likely become unable to repay the convertible notes using only its BTC holdings, and as a result, may need to consider restructuring, issuing new shares, or raising additional debt over time.
The leadership stressed that such a scenario is considered very unlikely and will develop over several years, which would give the company time to respond if the markets deteriorate significantly.
“In the extreme bearish scenario, if there is a 90% drop in the price of Bitcoin to $8,000, which is really hard to imagine, this is the point where our BTC reserves equal our net debt and we cannot repay our convertible bonds with our BTC reserves and we have to look at either restructuring or issuing more debt,” he told me. Bitcoin Price”.
At the same time, note that Lee’s comments come just months after a strategy director acknowledged the possibility of a situation that could force the company to sell Bitcoin. As reported by Pinkrypto, Fong Lee reported a Bitcoin sales catalyst related to mNAV and liquidity pressure.
During his participation That Bitcoin Deadexplained CEO Fong Li The specific catalyst that could force a company to sell Bitcoin: :
- First, the company’s shares must trade at less than 1x mNAV, meaning that the company’s market capitalization is below the value of its possible Bitcoins.
- Second, MicroStrategy must be unable to raise new capital by issuing shares or bonds. This means that financial markets will be closed or very expensive to access.
Therefore, the latest statement does not contradict Fong Lee’s previous position, but adds another layer of risk.
Explain that before, the sale of Bitcoin was based on the trading of shares below the value of the net assets added and the closing of the capital markets. Now, he explains, in the event of an extreme collapse of 90%, the immediate problem would be the debt service, which will probably be addressed first through restructuring or new financing – not necessarily through the sale of Bitcoin.
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Big exposure to Bitcoin comes with big losses
The strategy remains the largest institutional holder of Bitcoin in the world, And announce said it owns 713,502 BTC as of early February 2026. The company acquired these holdings at a total cost of approximately $54.26 billion, according to Financial results for the fourth quarter.
However, the decline of Bitcoin during the last months of 2025 had a significant impact on the budget. The company reported unrealized losses on digital assets of $17.4 billion for the quarter, and a net loss of $12.4 billion. This highlights The sensitivity of its financial performance to market fluctuations.
At the same time, the strategy continued to raise significant capital. The company said it will raise $25.3 billion in 2025, making it among the largest equity issuers in the United States.
At the same time, they said they have also built up a reserve of US$2.25 billion intended to cover about two and a half years of dividend and interest obligations.
Executives argue that these measures increase liquidity and provide flexibility, even during… Periods of market stress.
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Bitcoin’s volatility highlights the risks
This disclosure comes in light of increased volatility in the digital currency markets. Bitcoin traded near $70,000 in early February before extending the downtrend to an intraday low of $60,000 on February 6. This shows how rapidly changing price action can enhance the outlook for highly leveraged treasury strategies.
The strategic capital structure relies heavily on debt, preferred stock and convertible instruments that have been used to accumulate Bitcoin over the years.
While this approach maximized profits during bull markets, it also… Increases losses during downturnsattracting more scrutiny from investors and analysts.
But, the company’s leadership insists that the long-term nature of most of its debt provides time to manage the cycles. They say this reduces the risk of forced liquidations in the short term.
Saylor redoubles his commitment to the long-term thesis
Elsewhere, CEO Michael Saylor reiterated his belief in Bitcoin despite recent losses, calling it a “digital round of capital” and urging investors to “hold strong.”
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Saylor and other executives argue that Bitcoin is still the most powerful form of money and that the company’s long-term strategy is built on holding the asset indefinitely rather than testing it to market cycles.
The company is also expanding its financial engineering efforts, including the expansion of digital credit instruments and preferred stock offerings. According to management, this aims to reduce volatility and diversify funding sources while continuing to accumulate Bitcoin.
Investors are divided about the risks ahead
The market reaction to the earnings release and the negative scenario was mixed. Supporters argue that Strategy’s massive bitcoin reserves and the ability to issue maturities of equity and debt over several years provide enough flexibility to weather even steep declines.
Critics argue that a prolonged bear market could force the company to make difficult decisions. The potential risks mentioned by investors include shareholder dilution, stress on the capital structure, or the potential sale of Bitcoin if financing conditions sour.
Jacob King said that the company is currently facing a massive loss of -$7.3 billion on its investments in Bitcoin, .
For now, the Strategy seems committed to its high-conviction approach. However, recognizing that its Bitcoin reserves only equal its debt, the company made it clear that even the most aggressive corporate strategies on Bitcoin have a theoretical breaking point, a point determined not only by market prices, but also by leverage limits.
