Bitcoin's Dip Below $90K Triggers 11% Drop in Strategic Equity, Fueling Liquidation Concerns

Shares of Strategy experienced an 11% drop on February 25 as Bitcoin's value dipped under $90,000, sparking concerns about a potential liquidation due to the company's extensive investment in Bitcoin.

Boasting a holding of 499,096 Bitcoins (BTC) worth approximately $44 billion, Strategy leads the corporate world as the largest holder of Bitcoin. Consequently, the company's financial stability is closely linked to fluctuations in the asset's market value.

The sudden decline has sparked discussions about a possible forced liquidation. Nevertheless, in a February 25 X post, capital market analysts The Kobeissi Letter pointed out that these fears are overblown.

Currently, Strategy carries $8.2 billion in debt against its ~$44 billion Bitcoin holdings, resulting in a leverage ratio of about 19%. To mitigate the risk of an immediate default, the majority of this debt is structured as convertible notes with conversion values below the current stock price.

Market panic related to liquidation is not unprecedented. Comparable apprehensions emerged during Bitcoin's 2022 plummet from $70,000 to $15,000, yet Strategy persisted in purchasing Bitcoin. The company's business strategy revolves around raising capital, acquiring Bitcoin, and treating its holdings as assets rather than liabilities.

Regarding the MicroStrategy liquidation:

As MicroStrategy, $MSTR, experiences a fall of over -55%, questions about "forced liquidation" are arising.

The company now possesses $44 BILLION worth of Bitcoin, could they be compelled to sell it?

Is liquidation even a possibility? Let us clarify.

(a thread)

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However, a sustained decline in Bitcoin would make it more challenging for Strategy to raise funds. If Bitcoin were to plummet significantly below Strategy's average purchase price of $66,350, investor confidence might diminish.

Given the company's financial setup, a forced liquidation would necessitate a fundamental corporate event such as bankruptcy or a stockholder decision, both of which are currently unlikely.

Michael Saylor, the founder of Strategy, has played down concerns about liquidation and emphasized the company's long-term commitment to Bitcoin. As of 2025, Strategy has already acquired over 50,000 Bitcoins and is currently holding approximately 2% of the cryptocurrency's supply.

As of February 26, Bitcoin is trading at around $88,500, briefly falling below $90,000 earlier. Over the past 24 hours, the cryptocurrency has decreased by over 5% and remains down by nearly 20% from its all-time high of $109,000.

Read More: "MSTR Shares Dip 5% due to Premium Slide to 1.6 following Bitcoin Price Decline"