This is the Bitcoin price that could trigger MicroStrategy’s liquidation

CryptoQuant founder reveals Bitcoin price could trigger a liquidation event for MicroStrategy in an attempt to allay fears.

Business intelligence firm MicroStrategy, led by Michael Saylor, remains one of the most prominent institutional investors in Bitcoin. The company has continually increased its Bitcoin holdings, despite the potential risks associated with such aggressive accumulation.

MicroStrategy’s Bitcoin liquidation price

While the company saw huge gains, so did some critics like Peter Schiff He expressed his concerns on these financial risks. Recently, Ki Young Jo, founder of CryptoQuant HighlightBitcoin market conditions that may lead to MicroStrategy’s liquidation.

MicroStrategy doesn’t go bankrupt unless an asteroid hits Earth.

for 15 years, #Bitcoin It has never fallen below the cost basis for long-term whales, which is currently $30,000.$MSTR The debt is $7 billion and it has $ Bitcoin The property is worth $46 billion. Based on Bitcoin alone, the liquid price is $16.5K. pic.twitter.com/cTwwTGYif4

– Ki Young Ju (@ki_young_ju) December 17, 2024

In an attempt to emphasize how likely this scenario is, he stated that MicroStrategy’s financial collapse would only happen in extremely catastrophic scenarios, such as an asteroid colliding with Earth.

At the time of its disclosure, MicroStrategy’s Bitcoin holdings were worth $46 billion. The company’s outstanding debt reached $7 billion, putting Bitcoin’s liquidation price at $16,500.

This means that Bitcoin would need to fall to $16,500 for the company to risk losing its huge holdings. It is worth noting that the last time Bitcoin was seen This price level It was November 2022, in the wake of the FTX collapse.

According to Joe, Bitcoin’s historical price data reassures MicroStrategy of the safety of its position. For over 15 years, the price of BTC has never fallen below the realized cost basis of long-term Bitcoin whales.

Could Bitcoin fall below the real price of ancient whales?

At press time, Bitcoin has maintained the $100,000 mark, and is currently trading for $102,268 despite… Bloodbath in the market yesterday. Meanwhile, the cost basis for long-term whales is currently $30,000, well above MicroStrategy’s liquidation price of $16,500.

For context, “long-term whales” refers to Bitcoin holders who have addresses holding more than 1,000 BTC for more than 155 days. These addresses exclude wallets linked to exchanges or miners. Historical data reveals that Bitcoin is consistently trading above the realized price of these whales.

Bitcoin came close to falling below this crucial measure for the price achieved in November 2022, during the Bitcoin collapse. FTX Empire. At that time, Bitcoin’s price had fallen to $16,600, dangerously close to the whales’ long-term realized price of $15,407. Despite the sharp decline, market bulls were able to stabilize prices and prevent further decline.

This rebound demonstrated the strength of Bitcoin’s support levels, especially when it approaches the price achieved for long-term holders. Since then, Bitcoin has remained well above the realized price scale, boosting confidence in the resilience of its price floor.

MicroStrategy’s Bitcoin Strategy

It is worth noting that MicroStrategy’s Bitcoin investment strategy involves leveraging convertible debt offerings to acquire massive amounts of assets, which has often raised questions about financial sustainability if market conditions become unfavorable.

The software company has so far spent $27 billion amassing 439,000 bitcoins at an average cost of $61,694 per bitcoin, according to Data From Sailor Tracker.

The current value of these holdings is $44.86 billion, reflecting a gain of $17.77 billion based on Bitcoin’s latest price of $101,000. Microstrategy Latest purchase It included 15,350 Bitcoins for $1.5 billion at an average price of $100,386.