MicroStrategy disclosed during its fourth-quarter 2025 earnings release an extreme downside scenario that could significantly burden its Bitcoin financing model. CEO Phong Le indicated that Bitcoin falling to about $8,000—roughly a 90% decline—would bring the company’s BTC holdings close to its net debt. In that scenario, the BTC holdings would not be sufficient to repay convertible notes, potentially prompting restructuring, equity issuances, or additional debt.
MicroStrategy, the largest publicly traded Bitcoin holder, reported holding about 713,502 BTC as of early February 2026, with those bitcoins purchased for roughly $54.26 billion according to the fourth-quarter results. The company’s 2025 results also showed $17.4 billion in unrealized digital asset losses and a $12.4 billion net loss, underscoring the vulnerability of earnings to volatility. The firm said it had raised $25.3 billion during 2025—the largest equity issuance by a U.S.-listed company—and built about $2.25 billion in reserves to cover roughly two and a half years of dividend and interest payments. Executives argued these steps strengthen liquidity and resilience in volatile markets.
Bitcoin traded near $70,000 in early February before intraday weakness pushed it to around $60,000 on February 6, illustrating how leverage-driven strategies can amplify downturns. The capital structure relied heavily on debt, preferred stock, and convertible notes to fund BTC purchases, with most debt carrying long maturities. Michael Saylor, the board chair, reaffirmed his belief in Bitcoin and described it as the “capital’s digital transformation,” urging investors to HODL.
Saylor and other executives maintain that Bitcoin remains the strongest form of money and that the long-term strategy centers on permanent ownership of assets rather than attempting to time market cycles. The company has also expanded its financial engineering with digital credit products and preferred stock offerings to diversify funding and continue accumulation of Bitcoin.
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