Key Insights:
- Bitcoin continues to make all time highs as the market celebrates.
- Amid these new developments, analysts are drawing attention to MicroStrategy’s aggressive Bitcoin purchases.
- According to analysts, this “optimistic feedback loop” could cause another Mt Gox-level crash if things go wrong.
Bitcoin continues to flirt with all time highs. And while this is happening, more and more analysts are warning that the crypto market may be sitting on a ticking time bomb.
And this bomb’s name is MicroStrategy. This firm was once a modest business intelligence firm. However, over the years, MicroStrategy has quickly become a Bitcoin powerhouse with over 597,000 BTC, equivalent to 3% of Bitcoin’s total supply.
At current prices, that’s a staggering $71 billion.
MicroStrategy Massive Bitcoin Bet, With Little Room for Error
MicroStrategy’s Bitcoin accumulation began in 2020 under the leadership of Michael Saylor. Since then, the company, which is now often referred to simply as “Strategy” has made a series of aggressive purchases.
MicroStrategy holds 3% of Bitcoin's total supply
$65 BILLION with massive leverage
Everyone's celebrating while this creates crypto's biggest liquidation risk
One company could dump everything and crash $BTC to zero
Here's the dark truth behind $MSTR buys 🧵👇 pic.twitter.com/jBkEdldkpN
— Leshka.eth ⛩ (@leshka_eth) July 13, 2025
The company has so far amassed 597,325 BTC at an average price of around $70,982 per coin. The company’s most recent purchase of nearly 5,000 BTC was made at over $106,000 per Bitcoin, in a show of its conviction.
However, this confidence comes at a cost.
Unlike regulated Bitcoin ETFs, which are required to maintain cash reserves and provide redemption mechanisms, MicroStrategy is operating without a safety net.
In essence, if Bitcoin’s price were to fall below its average purchase price, the company would begin to face real financial pressure. This said, if Bitcoin were to crash massively, the company would be forced to sell assets to stay afloat.
“This is not just a high-beta Bitcoin play—it’s a leveraged bet with very little margin for error,” warned analyst Leshka.eth, one of the most vocal critics of MicroStrategy’s accumulation trend.
The “Premium Feedback Loop” and Market Fragility
Many investors have turned to MicroStrategy stock (MSTR) as a proxy for Bitcoin exposure.
At times, MSTR has traded at a premium of up to 100% over its net asset value (NAV). This inflated valuation has allowed the company to raise more capital and buy more Bitcoin, which in turn fuels a cycle of bullish sentiment.
Saylor’s strategy hinges on constant $BTC optimism:
• Rising prices = victory
• But if sentiment sours, the system cracks – funding dries up, debt gets expensive, and pressure mounts
• It’s a one-way bet with zero margin for error pic.twitter.com/447l1HN9ki— Leshka.eth ⛩ (@leshka_eth) July 13, 2025
However, Leshka calls this cycle a “premium feedback loop”. If market sentiment turns and that premium disappears, MicroStrategy may struggle to raise new capital.
In such a scenario, the company could face the painful choice of either diluting its shareholders or selling off Bitcoin, which could trigger a market-wide sell-off.
The risk is not just hypothetical. Leshka compared the situation to the 2022 Terra-LUNA collapse. Over $40 billion in market value evaporated virtually overnight due to a similar over-leveraged setup.
In the worst-case scenario, a MicroStrategy meltdown could spark a Bitcoin crash far worse than the infamous failures of Mt. Gox or Three Arrows Capital (3AC).
MicroStrategy Weak Core Business Adds to the Risk
While MicroStrategy’s Bitcoin portfolio has grown, its original business model has been shaky.
Last year, the company’s software revenue fell to a 15-year low of $463 million and its workforce has shrunk by more than 20% since 2020. This means that MicroStrategy is now functioning more like a Bitcoin investment fund than a diversified technology company.
This transformation has raised some serious questions about its ability to remain sustainable over the long term. It now has all its assets tied to Bitcoin, which means that the company’s success (or failure) is now entirely dependent on the crypto market’s performance.
