Strategy Says It Can Survive Bitcoin Crash to $8K

Key Insights:

• Strategy says $6 billion net debt remains covered even if Bitcoin drops to $8,000.
• Company plans to convert convertible notes into equity over the next six years.
• Strategy continues Bitcoin purchases despite unrealized losses exceeding $5 billion.

Michael Saylor said Strategy can withstand a steep drop in Bitcoin and still meet its debt obligations. He stated that even if Bitcoin falls 88% to $8,000, the company would have enough assets to cover what it owes. Strategy currently reports about $6 billion in net debt.

In a recent post, Saylor wrote that the firm can “fully cover our debt” even at that price level. A chart shared by the company showed that the value of its Bitcoin holdings would remain close to its net debt in that scenario. The statement comes as Bitcoin trades below its recent highs.

Plan to Convert Debt Into Equity

Saylor said Strategy plans to convert its convertible notes into equity over the next three to six years. The company intends to reduce debt by issuing shares instead of taking on new senior loans. This move would lower pressure on the balance sheet over time.

He said the existing convertible notes are manageable under current terms. By converting them into equity, the company would reduce future repayment risk. Saylor stated that this structure provides “security” during periods of market weakness.

Management Addresses Downside Scenario

Strategy CEO Phong Le also spoke about the impact of a sharp Bitcoin decline. He said that even if Bitcoin drops 80%, it would take years for the effect to reach the company’s core operations. He noted that this time frame gives management room to adjust if needed.

Saylor repeated that Strategy does not plan to sell its Bitcoin. He said the company intends to continue buying Bitcoin at least once each quarter. He added that the firm remains committed to its accumulation plan despite recent price pressure.

Continued Bitcoin Purchases

Last week, Strategy bought 1,142 Bitcoin worth about $90 million. Saylor posted his regular Bitcoin tracker update, which often signals a new purchase. The firm has continued buying even as it reports more than $5 billion in unrealized losses.

Strategy’s stock rose about 10% on Friday after its earnings release. The gains came despite ongoing volatility in Bitcoin prices. Saylor also called on the United States to build a strategic Bitcoin reserve and pass laws that support digital asset growth.

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