Michael Saylor’s debt strategy is back in focus after Strategy reported that even if Bitcoin fell to $8,000, the company would retain sufficient assets to fully cover its outstanding obligations.
The firm also indicated that it intends to convert its convertible debt into equity over the next three to six years to mitigate refinancing risk and extend its capital structure runway.
Saylor has expressed confidence in navigating extreme volatility. “If Bitcoin falls 90% for the next four years, we’ll refinance the debt… “We’ll just roll it forward,” Saylor said, adding that lenders would likely continue extending credit because Bitcoin’s volatility implies persistent underlying value.
Moreover, the Strategy founder dismissed the prospect of a collapse to zero and said he does not expect prices to reach $8,000.
Critics argue that such assurances underestimate liquidity risk. Peter Schiff contended that if Bitcoin holdings were valued at $6 billion against $6 billion in liabilities, a forced liquidation during a severe drawdown would likely yield significantly less than the quoted market price, particularly if large-scale selling pressure intensified.
Charles Edwards of Capriole Investments also questioned the refinancing premise more directly, stating, “If Bitcoin went to $8K, no one is going to refinance MSTR, it would go to 0 instantly.”
Edwards argued that in historical leverage scenarios, capital rarely rescues distressed balance sheets. The founder added that the company’s model depends on sustained double-digit annual Bitcoin growth and suggested it may ultimately need to evolve into a Bitcoin bank generating real yield to remain viable over the long term.
Bitcoin is trading at $67,870 at the time of writing, up 1.08% over the past 24 hours, amid four consecutive weeks of ETF outflows totalling $3.7 billion.
While corporate treasury accumulation provides structural demand, recent technical weakness near the $68,000 to $70,000 range highlights the tension between leverage, volatility, and long-term conviction.
Source: https://zycrypto.com/strategy-speaks-on-plans-to-offset-debt-with-equity-if-bitcoin-falls-to-8000/
