MicroStrategy Only Goes Bankrupt If This Happens, Says CryptoQuant CEO

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As a seasoned crypto investor with over two decades of market experience under my belt, I find myself intrigued by MicroStrategy’s current financial situation, particularly its significant Bitcoin investments. Ki Young Ju’s analysis provides a reassuring perspective on MicroStrategy’s solvency, but I must admit that it’s not the first time I’ve heard such bullish assessments in this wild world of crypto.

Speaking about X, the CEO of CryptoQuant, Ki Young Ju, offered a blunt evaluation of MicroStrategy’s current financial situation, particularly regarding their investment in Bitcoin.

Can MicroStrategy Go Bankrupt?

Ju explained, “MicroStrategy will not go bankrupt unless a catastrophic event like an asteroid hitting Earth occurs. For the past 15 years, Bitcoin has never dipped below the initial investment cost of long-term investors, which is currently $30K. MicroStrategy’s debt stands at $7 billion, while its Bitcoin holdings are valued at $46 billion. In terms of Bitcoin alone, the liquidation price comes out to be around $16.5K.” He also suggested, “I understand that calculating the liquidation price may seem unnecessary right now, but please try to keep things as straightforward as possible.

A positive assessment about MicroStrategy’s financial stability emerges in contrast to pessimistic opinions, notably from Bitcoin critic Peter Schiff. In a recent interview, he predicted a grim future for MicroStrategy: “To be honest, I believe MicroStrategy will go bankrupt. I anticipate that Bitcoin will eventually plummet, and the creditors will ultimately acquire the company.” This is his viewpoint on the matter.

MicroStrategy’s latest financial maneuvers and market behavior are quite substantial. Just last week, they were included in the esteemed Nasdaq-100 index, a move that might encourage additional investments and boost their market reputation.

On December 16, 2024, MicroStrategy revealed that it had augmented its Bitcoin holdings by purchasing an additional 15,350 Bitcoins at approximately $100,386 each, which boosted its total to 439,000 Bitcoins. This massive acquisition cost around $27.1 billion, with the average price per Bitcoin being roughly $61,725.

Towards the close of October, the company unveiled a bold approach for purchasing Bitcoins, dubbed the “21/21 plan.” This strategy aims to gather approximately $21 billion by selling shares and bonds, with the sole purpose of expanding its existing Bitcoin holdings. Since revealing this plan, MicroStrategy has been consistently purchasing Bitcoins on a weekly basis.

Charles Edwards, the CEO of Capriole Investments, anticipates an increase in Saylor’s Bitcoin acquisition strategy. He stated, “We expect a significant surge in Saylor’s Bitcoin purchases soon. Being listed on NASDAQ adds substantial credibility for fundraising. My prediction: MicroStrategy’s 21/21 plan will be completed within three months.

Including MicroStrategy in the Nasdaq-100 index could potentially create a self-reinforcing cycle for both MicroStrategy and Bitcoin, as explained by macro analyst Alex Krüger on X: “If Microstrategy joins the Nasdaq, investors must buy MSTR shares because it’s part of the index. This allows Saylor to sell more shares and invest in more Bitcoin, which drives up BTC prices. As BTC increases, so does MSTR, making you want to purchase more shares to meet the index requirements. Repeat this process, and Bitcoin could potentially grow exponentially.

At press time, BTC traded at $107,226.

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2024-12-17 19:26