Strategy, formerly known as MicroStrategy, has raised eyebrows after publicly outlining the impact of a potential Bitcoin crash to $25,000. While the company insists the scenario is designed to reassure creditors, the move has instead fueled speculation and unease among investors. By quantifying the potential fallout of such a deep correction, Strategy underscores just how tightly its financial destiny is now tied to the price of Bitcoin.
In its post on X, the company explains that with Bitcoin trading at $74,000, roughly its average purchase price, its internal “BTC Rating” still shows a 5.9 ratio between the value of its Bitcoin holdings and its convertible debt. Even at $25,000, the ratio would remain at 2. In essence, Strategy claims it can withstand a drop of more than 70% from the current market level, where Bitcoin is hovering around $87,000.
On paper, the message is meant to reassure. Strategy emphasizes that its $8.2 billion in convertible debt remains fully covered by its Bitcoin war chest, even under what many would consider an extreme market crash.
But online, the disclosure has sparked confusion. Why publicly reference such a low price target unless it reflects a scenario the company is actively weighing? Several analysts and traders argue that the mere mention of $25,000 hints at underlying jitters, especially as Strategy’s stock has already suffered a sharp correction on the market.
A Fortress of Bitcoin, Even in Turbulence
They are preparing for bear market strategy already ? https://t.co/eQfHDoF9jf
— Ritesh (@Ritesh_Trades) November 25, 2025
Despite the noise, the raw numbers remain striking. Strategy holds nearly 650,000 BTC, acquired at an average price of roughly $74,433, representing more than $48 billion in total investment. At current prices, the position is worth more than $56 billion, amounting to over 3% of all circulating Bitcoin supply.
Against this massive stash, the company’s $8.2 billion in convertible debt is heavily over-collateralized. Even when factoring in roughly $7.8 billion in preferred stock, Strategy’s total obligations come to around $16 billion. The firm reports a consolidated BTC Rating of about 3.6, meaning it holds more than three times the value of its financial commitments in Bitcoin at today’s prices.
This structure gives the company one key advantage: time. Most of Strategy’s debt does not mature until 2028–2032. Analysts also point out that Strategy retains non-Bitcoin assets and cash flows from its software business. In other words, the company faces no immediate pressure to liquidate its Bitcoin holdings during market corrections, even if the stock remains under stress.
If $BTC drops to our $74K average cost basis, we still have 5.9x assets to convertible debt, which we refer to as the BTC Rating of our debt. At $25K BTC, it would be 2.0x.
— Strategy (@Strategy) November 25, 2025
The Real Pressure Point: Strategy’s Stock, Not Its Balance Sheet
The turbulence today is centered not on blockchain markets but on equities. Strategy’s stock has dropped roughly 40–50% from its yearly highs, a surge initially fueled by Bitcoin’s rally and subsequently undone once speculative enthusiasm cooled.
The volatility is amplified by Strategy’s capital structure. To amass its massive Bitcoin holdings, the company repeatedly issued common shares, preferred equity, and convertible debt. As long as markets embraced the “Bitcoin at all costs” doctrine, the strategy worked. But when the stock’s premium over its Bitcoin reserves narrows, each new fundraising round is seen less as strategic genius and more as dilution risk.
Index inclusion adds another layer of tension. Strategy was already removed from the S&P 500, and potential exclusion from certain MSCI indices remains a looming concern. Forced selling by index funds could intensify downward pressure regardless of the company’s Bitcoin-backed balance sheet strength.
A $25,000 Scenario Says as Much About Bitcoin as It Does Strategy
A plunge to $25,000 would represent a roughly 70% decline from current levels. While dramatic, such drawdowns are not unprecedented in Bitcoin’s historical cycles. Strategy’s stress test is ultimately a reminder that extreme volatility remains statistically possible, even if no one can predict when such a move might occur.
