Emily Walker
Ki Young Ju, CEO of CryptoQuant, a prominent analytics company, gave a pointed analysis regarding MicroStrategy’s financial situation concerning its Bitcoin assets through a post on X.
Is MicroStrategy at Risk of Bankruptcy?
Ju claimed, “MicroStrategy would only face bankruptcy if an asteroid were to strike Earth. Over the last 15 years, Bitcoin has consistently remained above the price point that long-term investors consider as their average cost, currently set at $30K. With MicroStrategy’s debt at $7 billion and its Bitcoin reserves valued at $46 billion, the liquidation price based solely on Bitcoin is $16.5K.” He recommended simplifying the analysis of liquidation price despite its seeming irrelevance at this time.
This positive outlook on MicroStrategy’s financial stability contrasts sharply with views from Bitcoin skeptic Peter Schiff. In a recent interview, Schiff warned, “I believe MicroStrategy will eventually go bankrupt. Ultimately, I foresee a crash in Bitcoin, leading its creditors to take control of the company.”
Recently, MicroStrategy has made significant financial moves, including its addition to the Nasdaq-100 index, a change anticipated to draw more investments and bolster its market presence.
Following this inclusion, on December 16, 2024, MicroStrategy revealed it had acquired an additional 15,350 BTC at roughly $100,386 each, increasing its total Bitcoin holdings to 439,000. The total expenditure on these Bitcoins amounted to approximately $27.1 billion, with an average purchase price of $61,725 per BTC.
In late October, the company introduced an ambitious initiative named the “21/21 plan,” aimed at raising $21 billion through equity and debt markets to bolster its Bitcoin stocks. Since this announcement, MicroStrategy has been regularly purchasing Bitcoin each week.
Charles Edwards, CEO of Capriole Investments, commented on the likelihood of an acceleration in their acquisition strategy, suggesting, “We are expecting to see a significant increase in Saylor’s Bitcoin purchases. Being part of the Nasdaq 100 greatly enhances their ability to raise capital. I predict the completion of MSTR’s 21/21 plan within the next three months.”
The Nasdaq-100 inclusion may initiate a beneficial cycle for both MicroStrategy and Bitcoin, as macro analyst Alex Krüger noted on X, “MicroStrategy is now in the Nasdaq. This requires investors to purchase MSTR shares because of its index status. As a result, Saylor can sell more shares to buy more Bitcoin, leading to a rise in BTC, which subsequently boosts MSTR, necessitating further share purchases to align with the index, and the cycle continues. Bitcoin could soar indefinitely.”
As of now, BTC is priced at $107,226.