Strategy CEO says Bitcoin needs 85% crash to threaten balance sheet

Bitcoin would need to fall 85% to about $8,000 to $10,000 before Strategy's balance sheet faces genuine risk, Chief Executive Officer Phong Le said.

"Until that point in time, we feel very secure about the balance sheet," Le said in a July 14 interview with Bloomberg TV. "What we need to do is build a capital structure that can withstand bear markets."

The company held 843,775 BTC as of July 12, acquired for $63.69 billion at an average price of $75,476 per coin, according to its SEC filing. Bitcoin traded at $64,800 on July 15, down 49% from its all-time high of $126,000 reached in October 2025. Strategy's preferred stock STRC, designed to maintain a $100 par value, fell below $75 in late June and now trades at $88.36.

The explicit threshold provides the clearest risk ceiling yet for MSTR investors and convertible bondholders, reducing fear around forced liquidation scenarios. Strategy's new Digital Credit Capital Framework, announced June 29, authorizes up to $1.25 billion in Bitcoin monetization to fund a USD reserve that stood at $3 billion as of mid-July, covering roughly 17 months of preferred dividend and debt obligations.

The $3 Billion Buffer

Strategy sold 3,588 BTC for about $216 million between June 29 and July 5, its first material Bitcoin sale under the new framework. The proceeds funded preferred-stock distributions and replenished cash reserves — not a bearish market call, Le said. The company made no Bitcoin purchases the following week, instead selling 4.8 million MSTR shares for approximately $466.7 million to boost its dollar reserve.

The reserve, combined with authorized monetization, gives Strategy about 25.9 months of liquidity against $1.76 billion in annual preferred dividend and interest obligations, according to the company's estimates. That compares with roughly 5.9 months of coverage in late May, when the reserve had dwindled to about $871 million.

What It Means for MSTR

MSTR stock has fallen 77% in the past 12 months to trade at $101.14, while the company's net-asset-value multiple briefly dipped below 1 in late June. For the stock to reclaim its premium, Bitcoin likely needs to climb back above Strategy's $75,476 average purchase price — a move of about 16% from current levels.

The last three Bitcoin bear markets lasted 12 to 14 months with drawdowns of 77% to 85%. The current cycle, now about nine months old with a 49% peak-to-trough decline, remains within historically survivable parameters for Strategy's capital structure, Le said.

This article is for informational purposes only and does not constitute investment advice.