Here’s The Only Way MicroStrategy’s Bitcoin Strategy Can Lead To Bankruptcy

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As a seasoned crypto investor with over a decade of experience in this wild and volatile market, I must admit that Ki Young Ju’s analysis on MicroStrategy’s Bitcoin Strategy has caught my attention. The idea that a company could potentially go bankrupt if the price of Bitcoin drops to $16,500 seems far-fetched, especially considering the massive success MSTR has seen so far.

According to Ki Young Ju, CEO of CryptoQuant, MicroStrategy’s ‘Bitcoin Strategy’ might potentially drive the software firm into bankruptcy under a single specific scenario. Remarkably, this approach has yielded significant gains for the company, despite facing criticisms regarding its method of amassing more Bitcoin.

How MicroStrategy’s Bitcoin Strategy Could Lead To Bankruptcy

In an X post, Ki Young Ju indicated that MicroStrategy’s Bitcoin Strategy could only lead to bankruptcy if the Bitcoin price drops to $16,500. He explained that MSTR has $7 billion in debt and $46 billion in BTC holdings.

Consequently, considering Bitcoin’s value, the company’s estimated liquidation point stands at approximately $16,500. The CEO of CryptoQuant further clarified that the company’s insolvency is highly unlikely, suggesting it would require a catastrophic event like an asteroid striking Earth for such a scenario to unfold.

Ki Young Ju pointed out that since its beginning, the price of Bitcoin has consistently remained above the purchase cost for long-term investors (whales), currently set at approximately $30,000. In a different post, this crypto leader stated that the lowest point in the previous cycle was around $16,000.

According to Ki Young Ju’s perspective, discussing a potential price target for Bitcoin at this point is analogous to hinting at the $3,000 price point when the cryptocurrency reached $60,000. Essentially, this crypto CEO expresses strong conviction that Bitcoin will not revisit the $16,000 price level again. In his opinion, it’s as if Bitcoin dropping back to $16,000 despite institutional adoption, ETFs, and MSTR purchases is akin to an asteroid impact on Earth.

As a crypto investor, I too share MicroStrategy’s confidence that the value of Bitcoin won’t plummet so drastically, as demonstrated by their persistent purchase of more Bitcoin even in the face of criticisms. The software giant just added another 15,350 BTC to its arsenal for $1.5 billion, increasing its total Bitcoin holdings to a staggering 439,000 BTC.

Saylor Highlights Company’s Success

In a recent post on platform X, MicroStrategy’s co-founder proudly showcased the company’s achievements, attributing them to their Bitcoin investment strategy. Saylor pointed out that this approach has resulted in a remarkable yield of 72.4% for MSTR treasury operations so far this year.

To clarify, this situation has resulted in a profit of approximately 136,965 Bitcoins for the company’s shareholders. With each Bitcoin currently valued at about $107,000, these Bitcoin earnings amount to roughly $14.66 billion for the year. Moreover, the value of their MicroStrategy shares has significantly risen, with the stock increasing more than 540% this year.

Saylor proposes that additional businesses and even administrations should consider adopting Bitcoin. Lately, he has proposed a structure for the U.S. to use Bitcoin as a means of addressing its $36 trillion debt.

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2024-12-17 17:31