Bitcoin Treasury Company Strategy Faces Critical Years Ahead
Although the Bitcoin treasury company Strategy (MSTR) has successfully maintained its position in the Nasdaq 100 index, significant concerns regarding its long-term sustainability are mounting. New analyses suggest that 2028 will be the critical year that determines the company’s survival, shaping both its future and the broader Bitcoin market.
The Growing Influence of Strategy’s Bitcoin Holdings
Strategy now holds a Bitcoin position substantial enough to exert considerable influence over the market. With an accumulation of Bitcoin well beyond the scale of a typical institutional investor or "whale," the company has effectively transformed itself into a defining player within the cryptocurrency landscape.
Tiger Research: “2028 Is the Real Test”
The blockchain research firm Tiger Research has pinpointed 2028 as a pivotal year in its examination of Strategy’s financial viability. This extensive report reveals a significant shift in Strategy’s capital-raising approach. Until 2023, the company was conservatively managing its portfolio, relying primarily on cash reserves and small convertible notes, maintaining holdings in the low 100,000 BTC range. However, beginning in 2024, Strategy dramatically amplified its leverage through a combination of preferred equity, At-the-Market (ATM) programs, and large convertible offerings. This leverage has created a feedback loop where rising Bitcoin prices make it possible to make even greater acquisitions.
The most pressing issue, however, lies in the substantial concentration of call options on these convertible bonds, all set to mature in 2028. This looming deadline introduces an estimated $6.4 billion in redemption pressure, posing a significant threat to Strategy’s continued operations. Investors have the right to demand early repayments, and unfortunately for Strategy, refusal isn’t an option.
No Cash Flow, No Safety Net
One of the alarming vulnerabilities identified by Tiger Research is the lack of cash flow generated from assets. Instead of deploying raised capital into productive ventures that could generate recurring revenue, Strategy has instead chosen to funnel nearly all of its resources into Bitcoin acquisition.
“Had the funds been deployed into productive assets, the firm would have a natural source of repayment,” the report emphasizes. “Instead, the focus on Bitcoin accumulation leaves little cash available for redemption.” This lack of diversification raises critical questions about the sustainability of its business model.
As 2028 approaches, if refinancing options remain elusive, Strategy may find itself in the untenable position of needing to sell approximately 71,000 BTC. At a hypothetical price of $90,000, this would account for 20-30% of the daily trading volume, potentially triggering market volatility and a downward spiral across the broader cryptocurrency landscape.
Bankruptcy Threshold Rising
The static bankruptcy threshold for Strategy stands at $23,000 as of 2025, necessitating a staggering 73% price decline for it to face insolvency. However, this threshold has increased notably from $12,000 in 2023 to $18,000 in 2024, as the company’s debt levels have risen more rapidly than its Bitcoin accumulation.
“Strategy’s structural risk appears low under normal circumstances but becomes extremely concentrated in 2028,” warns Tiger Research. The looming threat of refinancing failure could precipitate selling pressures capable of impacting the entire Bitcoin market.
Compounding the situation is the fact that newer digital asset treasury companies encounter even greater risks, lacking the multi-layered safety mechanisms that Strategy has developed through navigating the tumultuous market landscape of 2022.
Nasdaq 100 Retention Amid Skepticism
Despite the rising concerns, Strategy managed to avoid removal from the Nasdaq 100 during the index’s most recent rebalancing. However, global index provider MSCI is set to review its inclusion in January. Market observers are increasingly arguing that Strategy’s buy-and-hold Bitcoin model resembles an investment fund more than it does a technology company.
Founded in 2020, Strategy was a pioneer of the corporate Bitcoin treasury model, establishing a blueprint that has since spawned numerous imitators worldwide. Yet, with Bitcoin volatility hammering share prices—Strategy has experienced a 47% loss over the past three months—the questions surrounding its leveraged position and its ability to meet impending debt obligations are only intensifying.
