Strategy stock plunged 11% on Feb. 25 as Bitcoin slipped below $90,000, raising concerns about a possible liquidation due to the company’s massive Bitcoin exposure.
With 499,096 Bitcoin (BTC) valued at around $44 billion, Strategy is the largest corporate Bitcoin holder, making its financial stability closely tied to the asset’s price movements.
The sharp drop has fueled speculation of a possible forced liquidation. However, in a Feb. 25 X post, capital market analysts The Kobeissi Letter noted that these concerns are exaggerated.
Strategy currently holds $8.2 billion in debt against its ~$44 billion in Bitcoin, maintaining a leverage ratio of around 19%. To lower the risk of an immediate default, the majority of this debt is structured as convertible notes with conversion values below the current stock price.
Liquidation-related market panic is not new. Similar worries surfaced during Bitcoin’s 2022 plunge from $70,000 to $15,000, yet Strategy kept buying Bitcoin. The company’s business plan is centered around raising capital, buying Bitcoin, and treating its holdings as assets rather than liabilities.
A prolonged Bitcoin decline, however, would make it more difficult for Strategy to raise money. Investor trust might wane if Bitcoin dropped sharply below Strategy’s average purchase price of $66,350.
Given the company’s financial structure, a forced liquidation would require a fundamental corporate event like bankruptcy or a stockholder decision, both of which remain unlikely.
Michael Saylor, Stategy’s founder, has downplayed fears about liquidation and emphasized the company’s long-term Bitcoin plan. In 2025, Strategy has already bought over 50,000 Bitcoin and is currently holding around 2% of the cryptocurrency’s supply.
As of Feb. 26, Bitcoin is trading around $88,500 after briefly dipping below $90,000. The cryptocurrency has dropped over 5% in the past 24 hours and remains down nearly 20% from its all-time high of $109,000.
