MicroStrategy’s Ongoing Bitcoin Acquisitions
It seems that MicroStrategy’s enthusiasm for Bitcoin (BTC) shows no signs of slowing down. The company regularly makes at least one purchase each week. As of now, MicroStrategy, often just referred to as Strategy, holds a staggering 714,644 Bitcoins in its reserves.
This stash represents about 3.4% of the entire Bitcoin supply, which is capped at 21 million coins. However, heightened exposure to Bitcoin naturally increases risk.
In its latest announcement regarding fourth-quarter financial results, the company acknowledged the continuing downward trend in the cryptocurrency market. At that point, Bitcoin prices had reached troubling lows. For firms like Strategy with substantial cryptocurrency holdings, this means their asset valuations could fall below what they initially paid.
CEO Feng Li mentioned that, while the current market conditions aren’t a direct threat to their business, there exists a concern for a potential scenario where Bitcoin might drop to $8,000. Interestingly, just 11 days after making those comments, Strategy reassured everyone that there was “absolutely no risk.”
The previous year had been particularly focused on Strategy’s balance sheet. In a move to exclude companies with over 50% of their balance sheets held in digital assets from its index, MSCI posed a risk for Strategy. Fortunately for them, in January 2026, MSCI decided to delay any action regarding this matter, which was certainly a relief.
Still, there are looming questions about whether Strategy would be able to withstand a severe market downturn.
On February 15, the company took to X to defend its financial standing. They emphasized that “Strategies can withstand drawdowns.” Li pointed out that even if Bitcoin were to hit $8,000, the company has sufficient assets to cover its debt.
The post also included a graph outlining Bitcoin reserves. Currently, with Bitcoin priced around $69,000, the value of these reserves stands at approximately $49.3 billion, while the net debt is about $6 billion. This indicates that their Bitcoin holdings are worth over eight times their net debt.
There was also an extreme downside scenario presented, estimating what would happen if Bitcoin’s price plummeted by 88% to $8,000. In that case, Strategy’s Bitcoin reserves would be valued around $6 billion, aligning closely with their net debt.
This results in a coverage ratio of 1.0x, suggesting that even with such a significant drop, the company’s holdings would still theoretically suffice to pay off all existing debt.
Beyond the numbers, Strategy highlighted the structure of its debt. The company’s convertible notes feature staggered maturities between 2027 and 2032, alleviating immediate refinancing pressure. Thus, there’s no urgency for repayment that could lead to forced liquidation.
Additionally, the firm plans to gradually convert its existing convertible debt into equity, rather than take on more senior debt.
