By Key Points
- MicroStrategy Bitcoin Risk Could Trigger Collapse Worse Than Mt. Gox
- Its $71B Bitcoin position is built on $7.2B in leveraged debt.
- Analysts warn it’s “crypto’s biggest liquidation risk” ever.
- A drop in BTC prices could trigger a market-wide cascade.
MicroStrategy, the largest corporate holder of Bitcoin, is sounding alarm bells across the crypto space. With a staggering 597,325 BTC on its books—worth more than $71 billion—the company now controls nearly 3% of the entire Bitcoin supply.
Top Public Bitcoin Treasury Companies. Source: Bitcoin Treasuries – Techtoken
But that mountain of Bitcoin isn’t sitting on solid ground. Since 2020,
has issued $7.2 billion in convertible debt to finance its aggressive BTC buying spree. The average purchase price? $70,982 per Bitcoin.
If BTC dips below that mark, the pressure could escalate fast.
Unlike regulated spot ETFs, which offer liquidity and built-in safety mechanisms, MicroStrategy has no such cushions. Its balance sheet is tightly tied to Bitcoin’s price. A significant drop could trigger serious consequences—not just for the company, but for the broader crypto market.
MicroStrategy holds 3% of Bitcoin’s total supply
$65 BILLION with massive leverage
Everyone’s celebrating while this creates crypto’s biggest liquidation risk
One company could dump everything and crash $BTC to zero
Here’s the dark truth behind $MSTR buys 🧵👇 pic.twitter.com/jBkEdldkpN
— Leshka.eth ⛩ (@leshka_eth) July 13, 2025
Crypto analyst Leshka.eth didn’t mince words, calling it “crypto’s biggest liquidation risk.” The fear is simple: if the price of Bitcoin crashes, MicroStrategy could be forced to sell. And a forced sale of 597K BTC would send shockwaves through every corner of the crypto world.
The Premium Feedback Loop That Could Snap
Investors often treat MicroStrategy’s stock (MSTR) as a proxy for Bitcoin, much like a public ETF. But there’s a dangerous twist.
MSTR regularly trades at a premium to the value of the company’s actual BTC holdings. This allows MicroStrategy to raise funds by issuing new shares, then use that money to buy more Bitcoin. It’s a self-reinforcing loop: the more BTC they buy, the higher the stock price climbs, and the more capital they can raise.
Strategy has acquired 4,980 BTC for ~$531.9 million at ~$106,801 per bitcoin and has achieved BTC Yield of 19.7% YTD 2025. As of 6/29/2025, we hodl 597,325 $BTC acquired for ~$42.40 billion at ~$70,982 per bitcoin. $MSTR $STRK $STRF $STRD https://t.co/xvWnSkfukS
— Michael Saylor (@saylor) June 30, 2025
But this “premium feedback loop,” as Leshka puts it, is built on sentiment.
If investor confidence wavers, that premium could vanish overnight. And if it does, MicroStrategy’s main method for funding its BTC strategy disappears too.
At that point, the company would be left with limited options, potentially including liquidating some of its Bitcoin. And given the scale of its holdings, even rumors of a sale could trigger a chain reaction across the market.
It’s not the first time crypto has seen such risk. The 2022 collapse of Terra-LUNA wiped out $40 billion in value due to over-leveraged bets and unsustainable financial models. Analysts worry that MicroStrategy could represent a similar risk, but on an even bigger scale.
Saylor’s strategy hinges on constant $BTC optimism:
• Rising prices = victory
• But if sentiment sours, the system cracks – funding dries up, debt gets expensive, and pressure mounts
• It’s a one-way bet with zero margin for error pic.twitter.com/447l1HN9ki— Leshka.eth ⛩ (@leshka_eth) July 13, 2025
This comes at a time when Ethereum ETFs in the U.S. are surging with $890 million in inflows this month alone, highlighting how investor confidence is shifting toward more regulated, transparent structures.
A Company That’s More Bitcoin Than Business
What adds more fragility to the situation is that MicroStrategy’s original business model—enterprise software—is shrinking fast. In 2024, the company posted just $463 million in revenue, the lowest in 15 years. Its workforce has been reduced by over 20% since 2020.
Today, the company operates more like a Bitcoin holding firm than a tech company. Its fortunes are directly tied to BTC’s price. With little diversification, any serious crypto market downturn would impact MicroStrategy far more than traditional firms or ETFs.
The NAV premium creates a risky feedback loop:
High premium ➝ MSTR raises cash ➝ buys more $BTC ➝ premium climbs
But in a downturn, it unravels quickly
Falling premium kills funding, so MSTR can’t keep buying $BTC forever (or can?) pic.twitter.com/WLyx2shDeA
— Leshka.eth ⛩ (@leshka_eth) July 13, 2025
This raises not only financial concerns but ideological ones as well.
Bitcoin was created to be decentralized. No single entity was supposed to hold too much power or control over the network. But with one public company holding 3% of the total supply, critics argue that MicroStrategy poses a centralization risk that goes against Bitcoin’s founding principles.
As Leshka said, “This is a single point of failure—exactly what Bitcoin was designed to avoid.”
These centralization concerns come at a time when altcoins are gaining traction amid Ethereum’s resurgence, further diluting Bitcoin’s dominance and making MicroStrategy’s concentrated bet look even riskier.
There once was a dream that was Bitcoin… this is not it.
ETFs
MSTR
Blackrock
Governments
“Institutional grade” custodians 🤮 pic.twitter.com/NuFwvq6mJD— Hodlorado ⛏️ (@hodlorado) December 2, 2024
Is a Collapse Inevitable or Just Overhyped?
Despite the warnings, not every analyst is ready to call this the next Mt. Gox.
MicroStrategy’s debt is long-term. Most of it doesn’t come due until between 2027 and 2031. For now, the company faces minimal interest payments and isn’t under immediate financial pressure.
There’s also the option to dilute shareholder equity instead of selling BTC—something CEO Michael Saylor has hinted at before. This would allow the company to raise cash without disrupting the market.
And then there’s the elephant in the room: Bitcoin continues to rise. As of now, it’s trading close to $120,000. If that trend holds, MicroStrategy’s position remains profitable, and the fears of forced liquidation stay theoretical.
Some analysts even point to broader market signals like the expected Fed rate cut in July, which could pump more liquidity into markets and sustain bullish momentum for crypto.
But the concern is less about what’s happening now and more about what could happen if the tide turns.
MicroStrategy’s entire strategy hinges on continued bullish sentiment. If that momentum fades—or worse, reverses—the impact could be felt far beyond its balance sheet. It could shake the very foundation of the crypto market.
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