Strategy’s aggressive Bitcoin strategy, while innovative, carries inherent risks tied to price fluctuations, as seen with the recent drop below $75,000, causing $900 million in unrealized losses. But the real financial ruin, which can force asset sales or bankruptcy, probably won’t occur until Bitcoin falls to $25,000 or less. At that level, the value of Strategy’s holdings would drop to about $17.8 billion, potentially insufficient to cover its outstanding debt obligations, which include convertible notes totaling several billion dollars due in the next few years.

This “point of no return” could trigger margin calls, liquidity crunches or covenant breaches, especially given the company’s reliance on rising equity and high-interest preferred stock dividends, which were recently increased to 11.25%, to fund new purchases.

Analysts are divided on Bitcoin’s trajectory. Most forecast stabilization in the mid-$70,000s in early 2026, citing possible Federal Reserve rate cuts and institutional inflows as supportive factors. For example, projections from sources like Changelly suggest an average of $134,000 by the end of the year, with highs still expected as high as $153,000 amid regulatory clarity.

However, a growing chorus of bearish voices is warning of steeper declines to $30,000 or less, driven by macroeconomic headwinds such as Fed policies, geopolitical tensions and reduced momentum from retail and ETF buyers. Crypto analyst Ben Cowen has even come up with scenarios for a prolonged bearish phase through the summer of 2026, potentially testing $10,000-$20,000 lows if correlations with stocks intensify.

Such a fall would compound Strategy’s problems, slowing its ability to raise capital at premiums and straining cash flows from dividends and operations. While the company holds no immediate risk of a forced sale (thanks to untouched BTC and cash reserves), leverage amplifies its downside. If BTC holds above $70,000, Strategy could weather the storm, but below $50,000 and dilution of share sales becomes inevitable, eroding shareholder value.

Consensus analyst ratings for MSTR remain bullish, with an overall “strong buy” based on data from Barchart. Coverage includes 16 analysts, which are split into 13 “Strong Buys,” one “Moderate Buy,” two “Holds,” and zero sells, reflecting strong confidence in their Bitcoin treasure play despite recent volatility. This rating has remained fairly stable as a “Strong Buy” for the past three months, with no notable downward shifts in consensus opinion amid the crypto winter, although some have slightly trimmed targets to account for near-term pressure.

Their average target of $464.36 represents a potential upside of 211% from the current share price around $146. This implies significant recovery potential if Bitcoin rebounds, positioning MSTR as a leveraged bet on the crypto’s resurgence.

As of the date of publication, Rich Duprey had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com