Bitcoin breaks through $98,000, MicroStrategy's contribution is invaluable.

The price of Bitcoin has recently surged strongly, breaking through the 98,000 USD mark, which has excited cryptocurrency enthusiasts. Looking back at this round of gains, the 40,000-70,000 USD range has been mainly driven by the Bitcoin ETF, while the 70,000-100,000 USD range has benefited from the support of MicroStrategy (.

Some opinions liken MicroStrategy to the Bitcoin version of Luna, which is an inappropriate analogy. As a staunch supporter of Bitcoin, I believe it is necessary to clarify the relationship between MicroStrategy and Bitcoin.

First, it is important to clarify a few points:

• MicroStrategy has essential differences from Luna, and its risk buffer is more adequate.
• MicroStrategy increases its Bitcoin holdings by issuing bonds and conducting stock offerings.
• MicroStrategy's most recent debt maturity date is in 2027, which is more than two years away.
• The main potential threat facing MicroStrategy comes from Bitcoin whales.

![15 billion USD conspiracy: Where will MicroStrategy send Bitcoin?])https://img-cdn.gateio.im/webp-social/moments-90af0030d8e21f0cd7bf5171ca595ca8.webp(

MicroStrategy has a more ample safety margin

MicroStrategy was originally a software company with a large cash reserve. Starting in 2020, the company decided to invest its funds into Bitcoin. After exhausting its own funds, MicroStrategy began to raise capital to purchase Bitcoin by issuing corporate bonds.

Unlike the mutual inflation of Luna and UST, MicroStrategy adopts a bottom-up dollar-cost averaging plus leverage strategy, which essentially means borrowing money to go long, provided that the directional judgment is correct. The acceptance of Bitcoin is far higher than that of UST, and the influence of MicroStrategy on Bitcoin is also far lower than that of Luna on UST. Therefore, MicroStrategy is by no means another Luna.

Bond and Stock Financing Boost Bitcoin Holdings

To quickly raise funds, MicroStrategy issued a total of approximately $5.7 billion in debt ), which is equivalent to 1/15( of a certain tech giant's debt, almost all of which was used to continuously buy Bitcoin.

MicroStrategy issued a type of convertible bond with a unique design:

1. Initial Stage:

   • When the bond price falls by more than 2%, the holder can convert the bond into stock and sell it.
   • When bond prices are normal or rising, holders can sell bonds in the secondary market.

2. Expiry Stage: Holders can choose cash redemption or conversion to stock.

This design is essentially risk-free for creditors:

• When Bitcoin falls and the company has cash, cash compensation can be obtained.
• When Bitcoin falls and the company has no cash, convertible stocks can be realized.
• When Bitcoin rises, more stock profits can be obtained.

This high lower limit and high upper limit trading design has allowed MicroStrategy to successfully raise funds. Fortunately, MicroStrategy chose Bitcoin as its investment target, and Bitcoin did not disappoint its expectations.

As the price of Bitcoin rises, the stock price of MicroStrategy also increases. Currently, MicroStrategy's daily trading volume has surpassed that of a well-known tech stock. This provides the company with more financing options, allowing it to raise funds not only through bond issuance but also by issuing additional shares.

Last week, Bitcoin surged from $80,000 to $98,000, thanks to MicroStrategy's efforts. The company raised $4.6 billion by issuing new shares, and invested all of it in purchasing Bitcoin, driving the price up.

![15 billion USD conspiracy: Where will MicroStrategy send Bitcoin?])https://img-cdn.gateio.im/webp-social/moments-112bb4c632e5e30389cada2b7252caf4.webp(

Debt repayment pressure temporarily manageable

Despite concerns that MicroStrategy may face a crisis similar to Luna, this is not the case.

According to the latest data, MicroStrategy's average cost for holding Bitcoin is $49,874, which is currently close to a 100% profit margin, providing a very ample safety margin. Even if the price of Bitcoin drops 75% to $25,000, it will not immediately trigger a crisis.

MicroStrategy uses over-the-counter leverage and does not have a forced liquidation mechanism. In the worst-case scenario, creditors may convert bonds into stocks and sell them on the market, but the company is not forced to sell Bitcoin.

More importantly, the earliest debt that MicroStrategy needs to repay is due in February 2027, which is more than two years away. Before that, the company is not forced to sell Bitcoin.

In terms of interest pressure, due to the design of convertible bonds being favorable to creditors, MicroStrategy enjoys very low interest rates. For example, the debt maturing in February 2027 has an interest rate of 0%, and several other debts have interest rates of only 0.625%, 0.825%, etc., with only one being 2.25%. Therefore, the interest pressure has a limited impact on the company.

![15 billion US dollars conspiracy: Where will MicroStrategy send Bitcoin?])https://img-cdn.gateio.im/webp-social/moments-5458f5a15f384d4530aff51d10eae4dc.webp(

Large holder behavior is a potential risk factor

Currently, MicroStrategy and Bitcoin have formed a mutually influential relationship. More and more companies are beginning to follow MicroStrategy's lead, such as a certain listed mining company that recently issued $1 billion in convertible bonds to purchase Bitcoin.

If this trend continues, the price of Bitcoin may rise further. Currently, a large amount of Bitcoin held by retail investors has flowed out, and the main participants in the market are the large holders. As long as these large holders do not sell off on a large scale, the upward trend of Bitcoin is likely to continue.

As of the time of writing, MicroStrategy has realized approximately $15 billion in unrealized gains. Based on the current trend, Bitcoin at $170,000 may be a mid-term target. Of course, this is not investment advice, just for reference.

In the cryptocurrency market filled with conspiracy theories, MicroStrategy's operations can be considered a top-level masterstroke, worthy of admiration.

![15 billion dollar conspiracy: Where will MicroStrategy send Bitcoin?])https://img-cdn.gateio.im/webp-social/moments-e99ddebf81e4c851070750cd1b364f85.webp(