Convertible Debt Shields MicroStrategy’s Bitcoin Treasury
MicroStrategy’s Bitcoin Treasury of 641,205 BTC (about $64 billion) is largely insulated from forced sales by its convertible debt structure. The company’s $1.01 billion senior notes due September 15, 2027, include a holder put right and can be settled in cash, stock, or both. Analyst Willy Woo estimates MicroStrategy’s stock must stay above $183 (implying Bitcoin near $91,500) to avoid any BTC liquidation at maturity.
Most analysts agree that only a dramatic, sustained price collapse would trigger a sale. Even if recovery slows into 2028, any BTC sale would be limited. This convertible debt arrangement shields the Bitcoin Treasury from margin calls and reduces potential supply pressure, supporting market stability. Traders can factor this resilience into risk assessments as Bitcoin navigates the next bear cycle.
Bullish
The announcement that MicroStrategy’s Bitcoin Treasury is protected by convertible debt reduces the likelihood of forced BTC sales, easing downward supply pressure. In the short term, traders can expect diminished sell-side risk around the 2027 debt maturity. Over the longer term, the structure ensures that Bitcoin holdings remain intact barring an extreme price collapse, bolstering market confidence. This stability-supporting mechanism is likely to have a bullish impact on Bitcoin’s price dynamics.