Corporate Bitcoin’s finances are a threat to market stability

Comparing this year’s Bitcoin (BTC) chart with the US dollar’s DXY index is a stark contrast. Bitcoin has surged to new heights and violated the $120,000 threshold, but DXY is expected to fall by nearly 10% by this year and continue to decline in the near future. In this environment, it is no surprise that more and more companies are relying on Bitcoin as an alternative asset to support their finances. However, this seemingly harmless trend can quickly turn into a threat not only to Bitcoin itself, but also to the broader financial markets.

Just a year ago, $100,000 for Bitcoin was still a distant dream, but Crypto was struggling to fight US regulators after the tragic collapse of 2022 and struggled to restore that image. Fast forward to today, the SEC has dropped and resolved most of the lawsuits against crypto companies, showing a much more response. Bitcoin, on the other hand, is increasingly adopted as a reserved asset by many US and several emerging market governments. My attitude towards Bitcoin has completely changed.

Not only that, the success of the world’s first Corporate Bitcoin Ministry of Finance (formerly Micro Strategy) was incredible. The company’s stock price has skyrocketed nearly 900% over the past two years, and is driven almost entirely by an aggressive Bitcoin accumulation strategy. While many companies navigate difficult market conditions, from tightening margins to stagnating growth, Michael Saylor enjoys his early Bitcoin shopping returns. This is an attractive outlook for other companies, especially given that the strategy’s original objective is enterprise software. This is far from today’s Bitcoin giant. Many believe he can emulate his success. But they’re grossly wrong.

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Saylor’s Safety Net

There are several reasons for this. First, Michael Saylor began purchasing Bitcoin in August 2020, with the average BTC purchase price just over $70,000, down around 40% below the current price. So he can easily get through major revisions and publicly state his intention to do so.

The strategy currently holds 601,550 BTC. This is 2.87% of total supply. If we assume that the total liability of the strategy is around $10-11 billion of debt and stock repayments, this still creates a break-even price somewhere on the $18,000 mark.

Still, this liability could be restructured as the majority of purchases were funded through convertible bonds. Furthermore, unlike exchanges and trading companies, strategies are not subject to forced liquidation. So, in reality, Saylor will almost certainly survive the easy slump of the market in the future.

Please be careful if you are a copycat

The Treasury Ministry of Other Companies is not in a much better position. For example, GameStop purchased 4,710 BTC (approximately $513 million) in May 2025. If you choose to continue this strategy now, you will be averaged at an even higher price. Other players currently entering the market, like Spanish coffee chain Vanadi Coffee, are buying at similar or even higher prices.

BTC Price Prediction This cycle varies, but $150,000 is widely considered a reasonable target. That’s just 25% profit from today’s level, but more importantly, the closer Bitcoin to this figure, the greater the risk of a massive correction. Even before that point, mid-cycle corrections of 30-40% are not uncommon, especially as volatility tends to surge near the top of the market cycle.

Michael Saylor won’t hit the eyelids if this happens or when it happens. This is because he agreed to very favorable terms for his fundraising. Meanwhile, others accept much worse conditions in a hurry to copy the strategy. For example, Sequans Communications raised $384 million to buy Bitcoin through a mix of discounted stocks and secured convertible obligations. This structure increases the risk to shareholders and makes the company vulnerable if Bitcoin prices fall.

Threat to stability

While companies like these, and perhaps others, may not disclose their holdings of Bitcoin, a 30-40% drop could cause shareholder pressure, credit issues, or forced liquidation. If these entities are fully exposed and act simultaneously, they can flood the market with Bitcoin at exactly the wrong moment. In July 2024, when the German government sold over 50,000 BTC from copyright infringing sites, prices fell sharply and emotions deteriorated for weeks, we have already seen how massive sales were rattling.

In addition to already deep fixes, this could plausibly cause a cascade of sales and a wider defeat, and could hurt not only the recklessly pivoted companies, but also the wider financial ecosystem. Whether Bitcoin likes it or not, BTC is increasingly entangled with traditional funds.

BlackRock’s Spot Bitcoin ETF is currently a $85 billion giant, with institutional allocators adding BTC to their portfolios, from hedge funds to pension plans. The government and states are investigating Bitcoin reserves. Once assets reach this level of systematic exposure, reckless corporate investment becomes a financial stability issue.

And pivoting into Bitcoin as a final ditch effort to save a struggling business line is nothing, if not reckless. Continuous volatility in Bitcoin – Even if it’s declining compared to previous cycles, things can be easily unraveled. So instead of trying to emulate Michael Saylor, it’s better for businesses to focus on their products, services, customers and strategies. That’s how we prepare for a slump in the economy.

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