🚨⚡ STRATEGY IN LOSS ON PAPER, BUT THE “DUMP” OF BITCOIN IS NOT A THREAT ⚡🚨
Bitcoin has just fallen below Michael Saylor's average purchase price, bringing Strategy's holdings to an unrealized loss of about 900 million dollars.
But does this mean the company is at risk of bankruptcy or will it have to sell its Bitcoins? The answer is NO.
This is not the first time this has happened.
Already in the previous cycle, Strategy's average purchase cost was around 30,000 dollars, while Bitcoin had plummeted to 16,000, over 45% lower.
Yet the company did not sell a single coin nor did it face forced liquidations.
The reason is simple: Strategy's Bitcoins are not used as collateral.
There are no margin calls related to the price of BTC.
Moreover, the company's debt is predominantly unsecured, with maturities between 2028 and 2030. We are talking about about 8.24 billion dollars of debt against over 53 billion in Bitcoin value, even at current prices.
Furthermore, Strategy has a liquidity reserve sufficient to cover 2.5 years of interest and dividends, without having to sell BTC to meet financial obligations.
So, a temporary drop below the average price does not change anything in their long-term strategy.
Saylor himself has admitted that only in the case of a prolonged period of weakness could selling be considered — but certainly not now.
