Capital Markets Pose Biggest Risk to Strategy’s Bitcoin Model, Report Says

Strategy, formerly known as MicroStrategy, has built a Bitcoin reserve valued at about $66 billion by repeatedly tapping debt and equity markets. Regime Intelligence said the model’s durability depends less on short-term swings in Bitcoin than on the company’s ability to keep raising capital while preserving its policy of holding, rather than selling, its core cryptocurrency position.

Regime Intelligence estimates that Strategy must meet roughly $1.76 billion in annual debt obligations. Continued access to financing would allow the company to raise cash without liquidating Bitcoin, according to the report. The larger threat would be a prolonged closure of funding markets or a sharp increase in borrowing costs, either of which could force Strategy to revise its balance-sheet approach even without a severe decline in Bitcoin’s price.