MicroStrategy CEO Confirms Bitcoin ‘Kill-Switch’ Amid Scrutiny of Squeezed Premium
MicroStrategy (now called Strategy) has confirmed for the first time that it could sell parts of its huge Bitcoin holdings in certain crisis
Quick overview
- MicroStrategy has indicated it may sell parts of its Bitcoin holdings in crisis situations, a shift from its previous stance of never selling.
- CEO Phong Le stated that selling would only be considered if the company's stock price fell below the value of its Bitcoin holdings and if access to capital markets became restricted.
- The company's stock has dropped over 60% since November 2024, raising concerns about its financial stability and the potential need to liquidate Bitcoin assets.
- Recent SEC filings reveal significant sell-offs by institutional investors, highlighting growing skepticism about MicroStrategy's strategy and financial health.
MicroStrategy (now called Strategy) has confirmed for the first time that it could sell parts of its huge Bitcoin BTC/USD holdings in certain crisis situations. This is a big change from Executive Chairman Michael Saylor’s long-standing advice to “never sell your Bitcoin.”
During a recent visit on the What Bitcoin Did podcast, CEO Phong Le talked about the conditions that might cause the world’s largest corporate Bitcoin holder to sell its assets. The company would only think about selling Bitcoin if two things happened: its stock price dropped below the value of its Bitcoin holdings (1x mNAV), and it couldn’t get new money through equity or debt markets.
“I wouldn’t want to be the company that sells Bitcoin,” Le said. But he went on to say that when capital markets become hard to access, selling parts of holdings becomes “mathematically justified” to maintain what the company terms “Bitcoin yield per share.”
The disclosure comes at a bad time for Strategy. The company’s stock has dropped over 60% from its peak in November 2024. It is now worth about $224 per share, down from an all-time high of $543. The company’s multiple to net asset value (mNAV), which compares Strategy’s market capitalization to the value of its Bitcoin holdings, is dangerously close to 0.95x, which is what analysts call the “danger zone.” This is a bad sign for investors.
When mNAV goes below one, the company is worth less than the Bitcoin it holds. This creates bad incentives and makes people wonder if its strategy of borrowing money to buy more Bitcoin will work in the long run.
MSTR’s Growing Financial Pressure
Strategy now has over 649,870 Bitcoin, which is worth about $59 billion. They bought these coins at an average price of $74,430 per. Many people on Wall Street now call the company a “leveraged Bitcoin ETF with a software company attached” instead of an enterprise software provider.
But such change comes with more and more responsibilities. Le said that the company has to pay between $750 million and $800 million in dividends each year on preferred shares that were issued during its Bitcoin development era. owners are worried about dilution because the corporation has been raising money aggressively, including their $42 billion “21/21 Plan” announced in October 2024. Since 2020, owners have reportedly been diluted by almost 260%.
Before, Strategy met these dividend obligations by selling additional equity at prices higher than its net asset value. But the stock price is falling quickly and the mNAV premium is going away, thus that way of getting money is getting smaller and smaller. Le said that when the premium is gone, stockholders may be more willing to sell Bitcoin to satisfy commitments than to further dilute ordinary shares.
Institutional Exodus
Wall Street has observed that the company is having trouble. Recent SEC filings show that big institutional investors like BlackRock, Vanguard, and Capital International sold off a total of $5.38 billion worth of Strategy shares in the third quarter of 2025. During this time, JPMorgan Chase sold off $500 million worth of shares.
Even Jim Chanos, a famous short-seller who had previously bet against Strategy, closed his short position after the mNAV metric dropped from 2.5x in December 2024 to current levels. He said he thought it would eventually hit 1.0x, which would mean that the company’s shares would be worth exactly as much as its Bitcoin holdings, with no extra value for Saylor’s strategy or management.
MicroStrategy’s New Transparency Measures
Last week, Strategy launched a “BTC Credit” dashboard to calm worried investors and show them that the company is financially stable. Management says that the company has enough money to pay dividends for decades, even if the price of Bitcoin stays the same. They also say that the company’s debt structure would still be viable if Bitcoin dropped to $25,000.
The corporation stressed that it doesn’t have to worry about being forced to sell off its assets because of how its convertible loan instruments are set up. But Le’s recent comments show that there is a voluntary liquidation trigger that is directly related to market valuation and liquidity problems.
Market Implications
Because Strategy is the world’s biggest corporate holder of Bitcoin, it has become a bellwether for how quickly businesses are adopting cryptocurrencies. For a long time, Saylor’s “HODL forever” theory was a way to show that Bitcoin will be valuable in the long run. Even if they are far away, the admission of sale conditions shows a change in philosophy from conviction to pragmatism.
Analysts say this sets a new measured risk level for Bitcoin markets. If Strategy’s mNAV keeps going down toward 0.9x and the financial markets stay closed to the company, a possible Bitcoin sell could make the market more volatile. The company’s holdings make up a large part of the Bitcoin supply that is currently in circulation, thus any liquidation would probably have an effect on the markets.
Le says that the board has no intentions to sell in the foreseeable future, and Executive Chairman Saylor keeps talking about how great Bitcoin is as a non-sovereign, rare asset that people all across the world want. But investors will be keeping a close eye on whether Strategy’s conviction strategy can handle its first real stress test, as the company’s stock and mNAV metric are under a lot of pressure.
On Monday, Strategy will give the market its next update. This is when the company usually announces how many Bitcoin it bought the week before. However, this week, Saylor hinted on social media that there might be a change from “orange dots to green dots,” which has led some people to wonder if the company might announce something other than more Bitcoin purchases.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save