Bitcoin Drop: Should We Worry About Strategy?
Michael Saylor’s aggressive Bitcoin accumulation strategy — could it survive the next bear market? Crypto analyst Willy Woo offers reassuring answers, supported by numbers. But a longer-term risk remains.
In Brief
- Willy Woo states that Strategy will not be forced to liquidate its bitcoins during the next bear market.
- The critical liquidation threshold is around 91,502 dollars for Bitcoin, well below current prices.
- Strategy holds 641,205 BTC, valued at about 64 billion dollars.
- A risk of partial liquidation remains if Bitcoin does not perform sufficiently in 2028.
Strategy Will Escape Any Bitcoin Liquidation According to Willy Woo
Willy Woo breaks growing concern in the crypto community. The analyst states on X that Strategy will not need to touch its bitcoin reserves during the next major market downturn. A stance that contrasts with the fears of some observers.
The key to this resilience? The very structure of Strategy’s debt. The company mainly relies on senior convertible bonds.
These instruments offer crucial flexibility: at maturity, Strategy can choose to settle its bonds in cash, common stock, or a combination of both. A flexibility that keeps the specter of forced liquidation at bay.
The numbers speak for themselves. Strategy faces a 1.01 billion dollar maturity on September 15, 2027. To honor it without selling bitcoins, the stock must remain above 183.19 dollars. A threshold that corresponds to a bitcoin at 91,502 dollars, assuming a net asset value multiple of 1.
On Tuesday, Strategy’s stock traded at 245 dollars, while bitcoin collapsed below the symbolic threshold of 100,000 dollars. Despite this drop, the safety margin remains comfortable.
Bitcoin Therapist analyst agrees. According to him, “bitcoin would need to experience catastrophic performance” to force Strategy to sell.
A scenario Woo considers unlikely : “ It would require an extremely prolonged bear market for Strategy to proceed with a liquidation. “
The 2028 Horizon, a Truth Test for the Saylor Strategy
Paradoxically, it is the lack of increase that could pose a problem. Woo warns that a “partial liquidation” remains possible if bitcoin fails to gain enough value during the anticipated bull market in 2028. A warning that tempers the prevailing optimism.
This caution contrasts with projections from some industry leaders. Cathie Wood, CEO of ARK Invest, and Brian Armstrong, head of Coinbase, predict a bitcoin at 1 million dollars by 2030 . A goal that would make any Strategy liquidation purely theoretical.
Meanwhile, Michael Saylor is multiplying initiatives to strengthen his positions. Strategy has just filed for a public offering of euro-denominated shares, targeting European institutional investors.
The company plans to issue 3.5 million shares at 100 euros each, with an annual dividend of 10%. A geographic diversification that reflects Saylor’s ambition.
Confidence Put to the Test by Turbulence
Woo’s analysis comes at a pivotal moment. Strategy’s stock lost nearly 6.7% in one day to reach its lowest level in seven months.
Bitcoin itself has dropped more than 10% over seven days. Numbers that fuel doubts about the sustainability of Strategy’s aggressive accumulation model.
In short, Strategy’s financial structure offers robust protection against the hazards of the next bear market. However, the long-term viability of this strategy will depend on bitcoin’s ability to maintain exceptional performance cycle after cycle. Michael Saylor’s bet remains intact, but the stakes rise as reserves accumulate.
