What’s Going On With Saylor’s Bitcoin Strategy, And Is A Collapse Coming?

Michael Saylor’s Bitcoin strategy has been in focus since the recent BTC crash. There have been speculations of what could happen to Saylor’s company, Strategy (MSTR), and its BTC holdings if the flagship crypto continues to crash. 

Schiff Predicts Bankruptcy For Saylor’s Strategy Amid Bitcoin Crash

In an X post, renowned economist Peter Schiff stated that Strategy’s entire business model is a fraud. He went on to challenge Saylor to debate this proposition with him. He added that regardless of what happens to Bitcoin, he believes that Strategy will eventually go bankrupt. Notably, MSTR’s mNAV recently fell below the value of its Bitcoin holdings, putting Saylor’s strategy at risk. 

Saylor’s Strategy has always benefited from trading at a premium to its Bitcoin holdings. However, with the mNAV now trading below 1, there are concerns about what may happen to the company if the Bitcoin bear market persists. Last week, Arkham suggested that Saylor and his company were offloading BTC. However, Saylor quickly dismissed these rumors, stating they were untrue. 

Saylor further stated that Strategy had bought Bitcoin every day last week despite the BTC crash, which the company confirmed this week when it announced an $835 million purchase. This marked its largest purchase since July, when it bought $2.46 billion worth of BTC. However, the company bought these coins at an average price of $102,171, which is well above BTC’s current price. 

This latest purchase has further put a significant amount of Strategy’s Bitcoin supply at a loss. CryptoQuant data shows that 43% of Saylor’s company’s BTC holdings are held at a loss, while 57% are in profit. This is based on the average purchase price per purchase rather than the total. Notably, the average purchase for the company’s total BTC holdings is $74,433. 

BTC Could Still Drop Below Strategy’s Average Buy Price

Veteran trader Peter Brandt predicted that Bitcoin could drop below $50,000, putting Strategy’s BTC holdings underwater. Brandt remarked that BTC could test Saylor ‘severely’ as it drops below their average purchase price. The trader explained that a drop below $50,000 could occur if the recent violation of the parabolic advance is similar to past events. 

A Bitcoin drop below Strategy’s average purchase price could put the company at risk of having to offload its holdings to repay its debts. Crypto pundit Dom Kwok claimed that Saylor’s company will be forced to sell its BTC to make interest payments. He added that treasury companies cannot operate when mNAV falls below 1, causing them to either sell their BTC or go bankrupt.  

Crypto pundit Mana warned that the market is about to witness a Strategy collapse. He claimed that investors are pulling out while the company’s earnings are bleeding. As such, he advised market participants to dump their MSTR shares. 

At the time of writing, the Bitcoin price is trading at around $91,400, up in the last 24 hours, according to data from CoinMarketCap.