Strategy Bitcoin Knowledge Bet: Can a coercive liquidation happen?

When the stock strategy submerged more than 11% on Tuesday morning, fears of potentially forced liquidation from the Samopusian company “Bitcoin Treasuri” spread in markets.

Although these fears are not unfounded – because the company is the largest corporate entity that holds BitCoin-concern can be overwhelmed.

This is because structural protective measures make the forced liquidation scenario for the “very little probable” strategy, according to the analysts on the Kobeisi

The way in which “convertible notes are structured”, with the strategy, connects the credibility to this claim, Kobeisa wrote on X on Tuesday.

The convertible note is a short-term debt instrument that turns into equity, is usually used to delay discussions about the company’s assessment.

Strategy It raises capital through convertible notes, including zero coupons bonds – such as an offer of $ 2 billion, which has reached 2030. Years, which can be converted into capital at the initial rate of 433.43 per share.

In fact, it allows the company to Safe capital without diluting the immediate shareholders.

Strategy is approximately holding 499,096 Bitcoin It is worth about $ 44.4 billion, which represents approximately 2.3% of the circulating asset offer.

Its Bitcoin estate is supported for $ 8.2 billion in convertible long, including zero coupon notes and relationships with low interest, with matures that extend through 2028 and 2030.

This makes the company debt “highly related to Bitcoin,” Trevor Koverko said, co-founder of the company Polimath security tokens Decipher.

The wider crypto market route, which launched hundreds of millions in forced liquidation this week, erased $ 3.7 billion from the Bitcoin Strategy Installation.

“Although not an immediate threat, a prolonged weakness could push its ability to fulfill obligations,” said Coverko. “Key pages with fear are in line with refinancing options.”

Although the solution of bankruptcy or shareholders who have been approved to initiate liquidation, the ability to collect capital – providing 1.8 billion dollars during the drop-down drop-down drop-down drop-down.

Another factor, according to the Kobeisi, is a strategy co-founder and the chairman of Michael Sailor 46.8% Voting stake. The realistic bet makes it “almost impossible to pass the vote of shareholders” without His tells, analysts said.

In Q3 2024. The Strategy has been reported $ 116.1 million In the revenues of the software, but published a net loss of 340.2 million, to a large extent due to the reduction of non-cash-moncain’s reductions that reflect the volatile nature of its farms.

The strategy model is inherently reflexively: the issuance of capital Bitcoin purchases, which in turn increases the net value of the property, allowing the continuation of capital.

However, the absent event of “Black Svan”, inevitable sales Bitcoin remains a little before the end of 2028. Year, leaving insolvency – not margin calls – as the only credible trigger for forced liquidation.

Even if Bitcoin fell 50% to $ 33,000, the strategy property would still surpass their debt over 100%, on the notes of Kobeisi.

Edited Sebastian Sinclair