MicroStrategy Can Sell Bitcoin If BTC Price Drops, According To Barnstein Report

Microstrategy, a leading company that has the most bitcoins. (Photo; Doc. Bittimes)

JAKARTA - MicroStrategy, a company known for its investment in Bitcoin, is under pressure as plans to increase its long-term debt. According to a recent report from Bernstein, if the price of Bitcoin drops dramatically, MicroStrategy may have to sell all of its Bitcoin holdings to protect its finances from the bad effects of the price decline.

MicroStrategy has invested around 4.49 billion US dollars (Rp67 trillion) in 152,000 Bitcoins with the aim of protecting and increasing its finances in the long term. However, if the price of Bitcoin drops, the value of this asset will not be enough to cover the debts that have been taken by the company. According to reports, the current value of Bitcoin held by MicroStrategy is only 49 percent of the company's market capitalization.

If the price of Bitcoin increases, MicroStrategy will benefit significantly. The increase in Bitcoin prices will strengthen the company's financial position, increase the value of shares, and assist in debt payments. However, if the price of Bitcoin drops or even falls, the company will face difficulties in paying off its debt when it matures.

MicroStrategy's decision as one of the largest institutional crypto holders also has the potential to have an impact on the crypto market as a whole. If the company sells its holdings, this could lead to Bitcoin price volatility and the crypto market in general. Massive sell-off can trigger negative sentiment and affect investor confidence, even triggering a prolonged market price drop.

However, keep in mind that the impact of MicroStrategy's decision will depend on other factors and events that occurred in the crypto market at that time. Bitcoin price movements and the overall crypto market are strongly influenced by factors such as market sentiment, institutional adoption, government regulations, and global crypto-related news.