MicroStrategy's stock (MSTR) has plummeted alongside Bitcoin's price decline, raising concerns about the company's financial stability and heavily leveraged Bitcoin investment strategy. The stock price dropped to $107, marking a 27% decline for the week and a staggering 76% loss since mid-July 2025. This sharp downturn is directly correlated with Bitcoin's fall below $65,000, with analysts warning of a potential slide below $60,000.
The company's market capitalization has suffered dramatically, retreating from a peak above $100 billion in July to approximately $31 billion. More critically, MicroStrategy's unrealized losses on its Bitcoin holdings have surged past $6 billion following intense selling pressure. This has led investors to question the sustainability of the company's model, which relies on debt to accumulate Bitcoin.
In response to mounting fears, company executives addressed concerns during a fourth-quarter earnings webinar. CEO Phong Le stated that the balance sheet could withstand a severe and prolonged Bitcoin decline, estimating that BTC would need to fall to around $8,000 and remain there for five to six years before debt obligations became a critical threat. At that extreme level, the value of the company's Bitcoin holdings would roughly match its net debt.
MicroStrategy reported a massive quarterly net loss of $12.6 billion, primarily driven by these unrealized losses on its digital assets. Despite this, CFO Andrew Kang emphasized the company's long-term focus, a sentiment echoed by Executive Chairman Michael Saylor. Saylor acknowledged the investor unease caused by sharp price swings but asserted the company was "built to survive severe market cycles." He also downplayed immediate risks from quantum computing to Bitcoin's cryptography, announcing a new 'Bitcoin Security' program to coordinate global research on potential future upgrades.
Currently, MicroStrategy holds over 713,500 BTC. A key metric watched by investors is the company's mNAV (market cap to net asset value), which fell to 1.08. Analysts note that if this ratio falls below 1, it could trigger a scenario where the company might be forced to sell Bitcoin. However, with a cash reserve of $2.2 billion, management insists such a "death spiral" is not imminent.
