Strategy stock took a sharp hit on February 25, plunging 11% as Bitcoin slipped below the crucial $90,000 mark. The decline has sparked concerns over a potential forced liquidation due to the company’s significant Bitcoin holdings.
As the largest corporate Bitcoin holder, Strategy currently possesses 499,096 BTC, valued at approximately $44 billion. Given its massive exposure to the cryptocurrency, fluctuations in Bitcoin’s price directly impact the company’s stock and financial outlook.
Concerns Over Liquidation
With Bitcoin’s recent decline, speculation about a potential liquidation event has surfaced. However, capital market analysts at The Kobeissi Letter have dismissed such fears as exaggerated. In a post on X (formerly Twitter) on February 25, they highlighted that Strategy maintains a leverage ratio of around 19%, with $8.2 billion in debt against its Bitcoin holdings. Importantly, most of this debt is structured as convertible notes with conversion values below the company’s current stock price, reducing the immediate risk of forced liquidation.
This is not the first time liquidation concerns have emerged. During Bitcoin’s dramatic drop from $70,000 to $15,000 in 2022, similar fears circulated, yet Strategy continued its aggressive Bitcoin accumulation strategy. The company has built its business model around acquiring Bitcoin and treating it as an asset rather than a liability.
Financial Stability and Future Outlook
Despite market jitters, Strategy’s financial structure makes an immediate forced liquidation unlikely. For such an event to occur, a fundamental corporate crisis—such as bankruptcy or a stockholder decision—would be necessary. At present, neither scenario appears imminent.
Founder Michael Saylor remains steadfast in his long-term Bitcoin strategy, downplaying the risks of liquidation. So far in 2025, Strategy has already added over 50,000 BTC to its holdings, reaffirming its commitment to Bitcoin accumulation.
Impact of Bitcoin’s Price Volatility
While a prolonged decline in Bitcoin’s price could make it more challenging for Strategy to raise capital, the company has previously navigated similar situations. Investor sentiment could shift if Bitcoin falls significantly below Strategy’s average purchase price of $66,350, but its strong financial backing and strategic positioning suggest resilience.
As of February 26, Bitcoin is trading around $88,500 after briefly dipping below $90,000. The cryptocurrency has fallen over 5% in the past 24 hours and remains nearly 20% below its all-time high of $109,000. Despite the recent downturn, Strategy continues to hold approximately 2% of Bitcoin’s total supply, reinforcing its role as a dominant player in the crypto investment space.
With Bitcoin’s price volatility persisting, the market will be closely watching Strategy’s next moves and whether the company can maintain investor confidence in the face of fluctuating cryptocurrency valuations.
