MicroStrategy May Need to Sell Bitcoin Holdings Amid Extreme Price Corrections



MicroStrategy's plan to raise long-term debt puts pressure on the company to potentially liquidate its Bitcoin holdings in the event of extreme price corrections, particularly around the debt's expiry in mid-2025, according to a report by broker Bernstein. The report highlights that higher bitcoin prices would strengthen MicroStrategy's balance sheet, share price, and debt repayment capabilities without the need to sell its cryptocurrency holdings. However, if Bitcoin crashes and the value of MicroStrategy's cryptocurrency holdings does not cover its debt and covenants, the company's corporate structure could face pressure.
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