In a recent regulatory filing, business intelligence firm Strategy disclosed the potential risk of selling its massive Bitcoin holdings to meet debt obligations.
The company, known for its aggressive Bitcoin acquisition strategy, may have to abandon its founder Michael Saylor’s longstanding “never sell BTC” pledge if market conditions persist.
Strategy Faces Liquidity Issues
Strategy has accumulated 528,185 BTC, with an average purchase price of $67,458, totaling approximately $40.1 billion in value as of the filing date. The company touts itself as the largest BTC-treasury entity, with its latest Bitcoin acquisition recorded on March 30th. However, the significant drop in the cryptocurrency’s market price has led to an unrealized loss of nearly $6 billion for the first quarter of 2025.
The Form 8-K filing with the US Securities and Exchange Commission (SEC) stated,
“As bitcoin constitutes the vast bulk of assets on our balance sheet, if we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell bitcoin to satisfy our financial obligations, and we may be required to make such sales at prices below our cost basis or that are otherwise unfavorable.”
The NASDAQ-listed company has highlighted the potential liquidity issues it faces due to heavy reliance on Bitcoin, which forms the bulk of its assets, coupled with a lack of sufficient cash flow from its software business. Currently, Strategy has amassed over $8 billion in debt, including substantial annual interest payments and dividend obligations on its preferred stock.
These financial pressures could force the company to liquidate its BTC holdings at a loss should it fail to secure timely financing through equity or debt. The filing also outlined risks tied to its Bitcoin strategy; the volatility of the asset’s price has contributed to significant unrealized losses in digital assets, which could worsen its financial struggles if market value continues to decline.
Despite adopting new accounting standards allowing for the fair valuation of Bitcoin, the company continues to face ongoing challenges in balancing its substantial digital asset portfolio against its financial obligations.
Trump’s Tariff Impact on Crypto
Bitcoin recently dipped below $75,000 but managed a slight recovery later in the day, coinciding with President Trump’s new global tariffs. Several top tokens experienced similar declines as traders retreated from major cryptocurrencies, erasing gains made during Tuesday’s brief rally amid Trump’s aggressive changes to global trade.
In particular, tariffs on Chinese imports were raised to 104%, with import taxes also increased for over 60 other trading partners, contributing to the market volatility.
For further insights, refer to the post on Strategy’s Bitcoin Holdings risk and potential obligations.
