Strategy’s Bitcoin Leverage Plans Under Fire as Market Value Sinks Below Holdings

For the first time since its pivot into digital assets, Strategy’s market value has slipped below the net asset value of its massive Bitcoin treasury, marking a critical reversal in the company’s long-standing leverage-driven playbook.

The drop signals that the Bitcoin it holds is now worth less than the debt used to acquire it, a structural imbalance that traders say could escalate into a dangerous feedback loop if bearish momentum accelerates. Market stress grew rapidly after Bitcoin plunged under $100,000, sliding toward $95,562 and placing renewed pressure on Strategy—once known as MicroStrategy—the world’s largest corporate Bitcoin holder.

This downturn has amplified concerns surrounding the company’s highly leveraged accumulation model, an approach powered by Chairman Michael Saylor’s strategy of tapping billions in borrowed capital to expand its BTC stash. While leverage delivers outsized upside during bull cycles, its downside becomes punishing during sharp market corrections.

As Bitcoin slides, the collateral base supporting Strategy’s loans shrinks with it. This dynamic is fueling trader anxiety about what some describe as a potential “death spiral” scenario, in which falling prices erode the value of Strategy’s Bitcoin reserve to the point that the company may be forced to sell into weakness to satisfy debt obligations. Even if forced liquidation never occurs, the possibility alone has been enough to reshape positioning across crypto markets.

A Sell-Off Would Shake the Entire Market

Much of the market’s unease stems from Strategy’s sheer scale. The company controls 641,692 BTC—about 3% of the circulating supply—making it one of the most influential single holders in the ecosystem. Any hint that Strategy might unload a portion of that trove could send shockwaves through already fragile price dynamics.

Saylor, however, moved quickly to counter speculation. Speaking with CNBC, he once again stressed his unwavering long-term outlook on Bitcoin and shut down rumors of any planned sell-off.

“Bitcoin is going to outperform gold, it’s going to outperform the S&P… if you’re a long-term investor, this is the place to be.”

Even so, today’s developments have sharpened questions about the sustainability of Strategy’s BTC accumulation plans. As Bitcoin’s decline exposes the inherent fragility of its leveraged structure, investors are reassessing whether the company can maintain its aggressive stance—or whether market physics will eventually force a shift in its approach.