MicroStrategy Clarifies True Breaking Point: What Happens First in a Bitcoin Collapse

MicroStrategy disclosed in its Q4 2025 earnings report the extreme downside scenario that would strain its Bitcoin treasury model. CEO Phong Le stated that a 90% decline in Bitcoin's price, bringing it to approximately $8,000, is the point where the company's Bitcoin reserves would equal its net debt, meaning they could no longer cover convertible debt using BTC alone. In this highly improbable, multi-year scenario, the company would consider restructuring, issuing new equity, or raising additional debt.

This clarification adds context to a previously stated trigger for selling Bitcoin, which required the stock to trade below 1x mNAV (market capitalization below BTC holdings value) AND capital markets to be closed or too expensive. The new disclosure suggests that in a severe crash, the immediate action would be addressing debt servicing via financing or restructuring, rather than an immediate forced sale of BTC. Despite reporting significant unrealized losses due to market volatility, MicroStrategy remains committed to its long-term Bitcoin accumulation strategy, supported by substantial capital raised in 2025.

(Source：BeInCrypto)