Michael Saylor's MicroStrategy (MSTR) is unlikely to be forced to sell any of its Bitcoin holdings to cover its debt obligations during the next significant crypto market downturn, according to Bitcoin analyst Willy Woo.
"MSTR liquidation in the next bear market? I doubt it," Willy Woo stated in a post on X on Wednesday.
MicroStrategy's debt primarily consists of convertible senior notes. The company is structured to settle these conversions as they become due by paying in cash, common stock, or a combination of both, at its discretion.
MicroStrategy's Debt Repayment Outlook
For the holder put right date on September 15, 2027, MicroStrategy will have approximately $1.01 billion in debt due. To avoid the necessity of selling Bitcoin (BTC) to repay this amount, MicroStrategy's stock price must trade above $183.19, Woo indicated.
This stock price level roughly corresponds to a Bitcoin price of around $91,502, assuming a multiple net-asset-value (mNAV) of 1, he added.
Bitcoin analyst The Bitcoin Therapist commented that Bitcoin would need to "perform horribly" in the next market downturn for MicroStrategy to be compelled to begin selling off its Bitcoin reserves.
"Would be one hell of a sustained bear market to see any liquidation for MicroStrategy," they added. MicroStrategy currently holds approximately 641,205 Bitcoin, valued at around $64 billion at the time of publication, according to Saylor Tracker.
MicroStrategy's stock concluded trading on Tuesday at a seven-month low, experiencing a decline of nearly 6.7% for the day to close at $246.99. Concurrently, Bitcoin was trading at $101,377, down 9.92% over the past seven days, as reported by CoinMarketCap.
Willy Woo Cautions on Potential for Partial Liquidation
While Willy Woo does not anticipate a full liquidation event in the upcoming bear market, he did caution that a partial liquidation remains a possibility if Bitcoin fails to experience substantial growth during the anticipated 2028 bull market.
"Ironically, there’s a chance of a partial liquidation if BTC doesn’t climb in value fast enough in an assumed 2028 bull market," Willy Woo noted.
Several prominent figures in the crypto industry, including ARK Invest CEO Cathie Wood and Coinbase CEO Brian Armstrong, have previously forecast that Bitcoin could reach the $1 million mark by the year 2030.