Will Strategy Be Forced to Liquidate $55B in Bitcoin After a 4% BTC Drop?
A viral claim circulating on X has sparked fear across the crypto community, suggesting that Strategy could face a massive $55 billion in margin calls if Bitcoin drops another 4%.
This raised concerns among investors, especially as the Bitcoin price has recently droped 5% today, trading near $63,212.
So Coinpedia stepped in to fact-check whether this claim is real or misleading.
Who Made This Claim?
The claim was made by DeFi researcher Crypto Nobler, who warned that a further 4% drop in Bitcoin’s price could trigger a margin call on Strategy’s Bitcoin holdings.
According to the claim, Saylor would be forced to liquidate Strategy’s entire Bitcoin position of over 717,000 BTC, valued at approximately $55 billion.
But is all this claim true? Let’s break it down.
Coinpedia’s Key Findings: What’s Actually True?
No Liquidation Risk, even if Bitcoin Drops 4%
Strategy currently holds 717,722 BTC, acquired at an average price of $76,018 per Bitcoin. With Bitcoin trading around $63,233, the company is sitting on an unrealized loss of about 17%.
Strategy’s Bitcoin holdings are primarily funded through convertible notes and corporate financing, not fully through margin-based loans.
This means that a 4% drop to near $60K alone is unlikely to trigger a forced liquidation of its entire holdings.
Strategy’s Debt Structure Prevents Automatic Bitcoin Liquidation
Unlike margin-based loans, Strategy funded most of its Bitcoin purchases using low-interest convertible notes with maturities extending to 2032.
Michael Saylor has also publicly stated that Strategy plans to gradually convert its debt into equity over time. This strategy helps the company protect its Bitcoin holdings and avoid selling assets during market volatility.
Strategy Can Survive Even If Bitcoin Drops To $8,000
Saylor earlier stated that even in an extreme scenario where Bitcoin drops sharply to $8,000, Strategy’s Bitcoin holdings would still be valued at around $6 billion, which is close to its total net debt of $5.6 billion.
Summary Table: Coinpedia’s Evidence Against the Theory
Conclusion
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