Strategy Says It Can Cover Debt Even if Bitcoin Falls to $8K
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Strategy claims asset reserves can match $6B net debt even if Bitcoin drops 88% to $8,000.
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Plans to convert convertible notes into equity over 3–6 years instead of adding senior debt.
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Firm keeps buying BTC despite $5B unrealized losses and recent MSTR volatility.
Strategy disclosed in recent official posts that it could fully cover debt even if Bitcoin drops to $8,000. The update came from the company and founder Michael Saylor during ongoing market volatility. The firm explained how asset reserves, debt structure, and future equity plans support that position.
Debt Coverage Claims and Balance Sheet Snapshot
Strategy stated that it currently holds about $6 billion in net debt. However, it added that its asset reserves could still match that level. Notably, the company illustrated this scenario using an assumed Bitcoin price decline of about 88%. Even under that condition, Strategy said its reserve value would remain near its net debt level.
According to the company, this structure gives flexibility during sharp market downturns. The firm emphasized that its convertible notes remain serviceable. As a result, the company said it has time to manage obligations without issuing new senior debt. This point sets up how Strategy plans to adjust its capital structure next.
Plan to Convert Convertible Debt Into Equity
Michael Saylor said Strategy plans to convert its convertible debt into equity over three to six years. He described this approach as a way to reduce balance sheet debt. Instead of refinancing, the firm would issue stock tied to existing convertibles. Therefore, the company avoids taking on additional senior liabilities.
Strategy added that this timeline allows gradual execution. Meanwhile, CEO Phong Le recently said an 80% Bitcoin price decline would take years to affect operations. That timeframe, he explained, would allow restructuring if needed. This comment connects directly to the firm’s continued Bitcoin position.
Continued Bitcoin Purchases and Market Reaction
Despite market pressure, Strategy said it does not plan to sell its Bitcoin holdings. Saylor also said the firm intends to keep buying Bitcoin each quarter. Recently, the company purchased 1,142 BTC for about $90 million. The move followed a period of falling prices.
However, the firm currently holds over $5 billion in unrealized losses. Strategy’s MSTR stock has also declined. Still, the stock rose 10% on Friday after earnings. Separately, Saylor urged U.S. policymakers to consider Bitcoin reserves, citing parallels with gold.
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Michael Saylor posted "Market closed, BTC opens" but did not disclose additional purchase information.
Over the past hour, the entire network has experienced over $26 million in liquidations, with BTC liquidations reaching $12.92 million.