Michael Saylor’s MicroStrategy, long the symbol of long-term Bitcoin hodling, has made a strategic shift that shouldn’t go unnoticed. Where ‘we never sell’ was once the mantra, it’s now explicitly stated when that promise could be broken. And that moment might be closer than many investors think.
Risk of a Death Spiral if Bitcoin Drops Another 15% #
MicroStrategy has indicated it will first build a $1.44 billion cash buffer before resuming aggressive Bitcoin purchases. This buffer is intended to cover two years of interest and dividend obligations, even if the market crashes.
Crucially, the company will have to sell Bitcoin if its stock price falls below the value of its Bitcoin holdings per share and it can no longer raise capital. Given current price movements, a drop of just another 15% could hit that red line.
And here’s the danger: if MicroStrategy starts selling, it could trigger a death spiral. The selling pressure would push Bitcoin’s price down, causing the stock price to fall further, which in turn leads to more selling pressure. This scenario wouldn’t just affect MicroStrategy, but also other companies holding Bitcoin on their balance sheets.
My Strategy: Buy Zones Between $55,000 and $65,000 #
If this scenario unfolds, the Bitcoin price could see a significant correction. My personal buy zone is therefore between $55,000 and $65,000. That’s the area where I plan to reinvest a large portion of my profits from this cycle—currently held in USDT. I expect a good chance of a bounce towards $80,000 from there, which could quickly yield a 40 to 50% profit.
Still, I’m preparing for the worst-case scenario. If Bitcoin were to fall further towards $40,000 or even lower, I want to have extra capital on hand to lower my average purchase price. In my view, this is not the time to go long with leverage, but to calmly build your positions for the next cycle. Understand the playing field and be prepared.