Analyst: Strategy won't have to sell Bitcoin even in a severe market downturn
Strategy won't dump its Bitcoin holdings in the next bear market, according to crypto analyst Willy Woo. He believes it would take a “pretty damn long bear market” to force the company to sell some Bitcoin.
Strategy's debt consists primarily of convertible senior notes. The company plans to repay the convertible notes as they mature using cash, common stock, or a combination of both, at its discretion. Therefore, Michael Saylor's Strategy won't have to sell any of its Bitcoin holdings to cover debt during the next significant downturn in the cryptocurrency market.
“MSTR liquidation in the next bear market? I doubt it,” the analyst wrote.
Critical levels to avoid selling
Strategy has approximately $1.01 billion in debt that matures on September 15, 2027. To avoid having to sell Bitcoin to pay it off, Strategy shares would need to trade above $183.19, Wu noted.
This price is roughly in line with Bitcoin's price of around $91,502, assuming a net asset value (mNAV) multiple of 1. Net asset value (mNAV) is a key metric for companies with cryptocurrency holdings.
Bitcoin analyst The Bitcoin Therapist stated that “Bitcoin would have to perform horribly” in the next market crash for Strategy to sell off Bitcoin.
“It would take a hell of a long bear market to see any liquidation at Strategy,” he added.
Current positions and market situation
Strategy holds approximately 641,205 bitcoins, worth approximately $64 billion at press time, according to data from Saylor Tracker.
Strategy shares closed Tuesday at a seven-month low, down nearly 6.7% to $246.99. Meanwhile, Bitcoin is trading at $101,377, down 9.92% over the past seven days.
Risks of partial liquidation in the future
While Woo doesn't expect the company to sell bitcoin during the next bear market, he warned of the possibility of such a scenario if bitcoin fails to rally strongly enough in the expected 2028 bull market.
“Ironically, there is a chance of a partial liquidation of assets if BTC does not rise in price quickly enough in the projected 2028 bull market,” said Willy Woo.
Some executives, such as ARK Invest CEO Cathie Wood and Coinbase CEO Brian Armstrong, predict that Bitcoin will reach $1 million by 2030.
Source: cryptonews.net
