Bitcoin price plunged to $80,760 on November 21, raising renewed concerns about Strategy’s BTC holdings, which sit at an average acquisition price of $74,433. Over the last five years, the firm has accumulated 696,870 BTC, making it the largest corporate Bitcoin treasury holder. However, amid ongoing market volatility, its bold Bitcoin strategy has come under scrutiny.
Recently, Strategy published an X post stating that its BTC holdings provide 71 years of dividend coverage if Bitcoin price remains flat at $87,000, and that only 1.41% annual appreciation is needed to fully offset obligations. The post addressed rising speculation that the company might sell its BTC if the price fell below its average purchase price.
As the pressure mounts and bearish conditions persist, what is the future of the company’s Bitcoin holdings? Let’s explore.
Genesis of the Strategy Bitcoin Play
To understand Strategy’s Bitcoin play, rewind to August 2020. Amid COVID-era money printing, Michael Saylor, Strategy’s co-founder and executive chairman, declared Bitcoin “digital gold.” At the time, Strategy made its first BTC purchase: 21,454 coins for $250 million at around $11,650 each. Fast-forward to today, and that treasury has ballooned to a stash worth over $60 billion at current prices.
However, Strategy’s Bitcoin plan has not been without criticism. Its most vocal critic has been economist Peter Schiff, who recently dismissed the strategy as misguided as Bitcoin’s price fell more than 30% in one month.
In a recent post, Schiff noted that the company’s profits remain modest at only 17%, despite spending billions to acquire BTC. He wrote:
“After over five years and more than $48 billion spent buying Bitcoin, MSTR now has total paper profits of less than 17%. Had Saylor bought just about any other asset, MSTR would have been better off.”
In a subsequent tweet, Schiff added that even if Saylor claims that the company “will be fine” if Bitcoin price drops 90%, its shareholders would not share the same sentiments. He noted that such a drop would cause massive losses.
Saylor has dismissed these concerns and continues to stand by a never-sell Bitcoin philosophy. In a recent interview with CoinDesk, he stated that “volatility is Satoshi’s gift to the faithful.”
Decoding the Tweet: A 71-Year Runway
With Strategy remaining unfazed by Bitcoin’s continued decline even after it formed a death cross, the company’s recent X post offered a fresh perspective on why it may continue holding its BTC reserves.
On November 20, Strategy shared a dashboard screenshot from its Credit tab. It showed that even if Bitcoin’s price remained flat at $87,300, the company could meet its dividend obligations for 71 years. Strategy also noted that it only needs a 1.41% annual increase in Bitcoin’s price to cover yearly dividend obligations.
Strategy added that a drop below $74,000 would not be unprecedented. In another X post, it noted,
“In the depths of the 2022 crypto winter, our average cost basis was $30K while BTC traded nearly 50% below it at $16K. What did we do? We bought more.”
Despite the clarifications, the crypto community remains divided about what the future holds.
One analyst on X, Hermes Lux, agreed with the company’s projection, arguing that even at $10,000, Strategy could still meet its debt obligations. He said:
“If BTC fell to $10,000 and stayed there for 8 years, MSTR could still pay its dividend obligations.”
However, others, such as tic toc, remain unconvinced, claiming that Saylor could face liquidation in the $69,000 to $72,000 range, which he believes would mark a market bottom.
CryptoQuant CEO Ki Young Ju also weighed in, arguing that the only scenario where Strategy would face bankruptcy is an extreme global event. He stated:
“Saylor would never sell Bitcoin unless shareholders want it. He has made this clear many times. Selling even a single BTC would destroy MSTR’s identity as a Bitcoin treasury company and trigger a death spiral for both Bitcoin and MSTR.”
Amid this broader debate, new concerns have emerged after JPMorgan suggested that Strategy may be dropped from major stock indices.
MSTR Stock Drops 43% YTD Amid De-Indexing Fears
MSTR stock has plunged more than 43% year-to-date, with the bulk of losses tied to Bitcoin’s ongoing downturn. The stock closed trading at $170.50 on Friday, a sharp decline from its November 2024 peak of $543.
Amid the slump, VanEck’s Head of Digital Research, Matthew Sigel, shared a JPMorgan note indicating that Strategy risks being excluded from major equity indices in January.
“With MSCI now considering removing MicroStrategy and other digital asset treasury companies from its equity indices… outflows could amount to $2.8 billion if MicroStrategy gets excluded from MSCI indices and $8.8 billion from all other equity indices if other index providers choose to follow MSCI.”
Saylor responded to the looming de-indexing, asserting that Strategy remains a software company with a unique treasury approach that uses Bitcoin as productive capital. He added:
“Index classification doesn’t define us. Our strategy is long-term, our conviction in Bitcoin is unwavering, and our mission remains unchanged: to build the world’s first digital monetary institution on a foundation of sound money and financial innovation.”
Schiff also weighed in, warning that Bitcoin treasury firms were at risk of collapse. In an interview with CoinDesk, he argued that companies buying Bitcoin would eventually be forced to sell because they were “going bankrupt.”
To sum up, Strategy’s Bitcoin approach remains one of the most debated positions in the market as critics warn that mounting losses and potential de-indexing could intensify pressure if prices fall further. Despite the uncertainty, the company continues to show unwavering commitment to its Bitcoin-first strategy, leaving the next phase of the BTC market cycle as the ultimate test of whether this conviction pays off or exposes the firm to deeper risks.
