Opinion: A sharp drop in bitcoin prices could jeopardize MicroStrategy's ability to service its debt
2025-01-11 14:15:25
11 news cointelegraph report finance science professor david krausedesk3cryptocurrencydesktopCrypto News
On January 11th, according to Cointelegraph, finance professor David Krause said that a sharp drop in the price of bitcoin could seriously affect MicroStrategy, jeopardizing its ability to repay its debt and possibly leading to financial distress or bankruptcy, triggering a stock sell-off. Financial analyst Jacob King said that when MicroStrategy's share price is higher than its net asset value of bitcoin, the company will raise funds through debt or equity to buy more bitcoin. This circular strategy will only work if BTC continues to rise. If BTC stagnates or crashes, the cycle will collapse.
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