Saylor Says Strategy Can Survive Another 90% Bitcoin Crash — Analysts Warn Otherwise

Core Insights - Bitcoin's recent drop below $90,000 has negatively impacted nearly all investors, including Strategy, a major corporate Bitcoin holder [1][2] - Michael Saylor, the executive chairman of Strategy, remains confident, asserting that the company can endure an 80%-90% decline in Bitcoin value [2][6] Company Valuation Metrics - Strategy's mNAV (multiple to net asset value) has fallen below 1, a concerning indicator for Bitcoin treasury firms, as it suggests the company's enterprise value is less than its Bitcoin holdings [5][6] - Analysts indicate that an mNAV below 1 is unsustainable for companies in the Bitcoin treasury sector, raising questions about their operational viability [6] Market Dynamics and Volatility - Saylor emphasizes that Bitcoin's historical volatility is part of its cycle, noting that it has experienced 15 significant drawdowns in its 15-year history but has consistently reached new all-time highs [3] - The annualized volatility of Bitcoin has decreased from approximately 80% in 2020 to around 50% today, according to Saylor [3] Debt and Liquidation Concerns - Saylor reassures that Strategy's debts are convertible, which means that even in a worst-case scenario where Bitcoin's value drops to zero, lenders cannot force liquidation of the company's holdings [4] - Analysts caution that the real issue lies in whether Strategy can continue to operate with its stock trading below the value of its Bitcoin assets [4][6] mNAV Implications - An mNAV greater than 1 indicates that investors are willing to pay a premium for the company's Bitcoin, allowing for easier capital raising through stock sales [7] - An mNAV equal to 1 means the market values the company at parity with its Bitcoin holdings, while an mNAV below 1 suggests that investors perceive the company as worth less than its Bitcoin assets [7]