MicroStrategy in Big Trouble? As Bitcoin Price 10% Away From Liquidation Threat

Bitcoin’s recent price swings have always been a hot topic, and this time, all eyes are on MicroStrategy and its co-founder, Michael Saylor. With Bitcoin slipping below $75,000, concerns are growing that MicroStrategy might be forced to sell its massive Bitcoin holdings to avoid liquidation. 

Prominent crypto trader Doctor Profit has sent a bold message to Saylor, suggesting that he could be the market’s next big victim.

MicroStrategy Liquidation Crisis Ahead?

MicroStrategy is one of the biggest institutional holders of Bitcoin, having accumulated over 528,185 BTC at a value of $40.94 billion till now. 

According to Doctor Profit, Bitcoin is now only 10% above MicroStrategy’s average purchase price of $66,384. If the market continues to decline, the company might need to sell BTC to avoid liquidation risks. 

This has created fear among investors, who worry that a potential Bitcoin sell-off by MicroStrategy could further push BTC prices down. For now, MicroStrategy has halted further Bitcoin purchases, possibly waiting to see where the market goes next.

MSTR Stock Saw a 15% Drop

Alongside Bitcoin’s drop, MicroStrategy’s stock (MSTR) has suffered a significant downturn, losing more than 15% in value over the past week. This sharp decline has been fueled by the broader market turmoil, including the ongoing global economic uncertainty and the recent correction in crypto prices.

Rumors of SEC Filing Add Sell-Off Threat

Adding to market fears, rumors suggest that MicroStrategy may have submitted an 8-K form to the U.S. Securities and Exchange Commission (SEC) on April 7. This document reportedly warns that if Bitcoin’s price keeps falling, the company might have to sell its holdings to repay debts.

However, a closer review of the filing reveals that MicroStrategy has included similar warnings in its past reports. This suggests that the statement is a routine risk disclosure rather than an immediate liquidation threat.

Is MicroStrategy Really at Risk?

While the warning sounds alarming, it’s important to consider MicroStrategy’s financial position. The company has leveraged billions in debt to buy Bitcoin, making its investment strategy a high-risk, high-reward play.

So far, Saylor has maintained confidence in Bitcoin, repeatedly stating that he has no plans to sell. However, if Bitcoin falls below a critical threshold, it could trigger margin calls on the loans backing MicroStrategy’s Bitcoin holdings. 

In such a case, the company might have to sell some of its assets, either Bitcoin or otherwise, to stay afloat.