Strategy Says Balance Sheet Can Withstand Major Bitcoin Decline

Strategy outlines how a prolonged Bitcoin slump could affect its debt, calling such an extreme scenario unlikely.

Bitcoin Treasury Company Strategy reassured investors that its finances remain stable despite Bitcoin’s recent price weakness. Company leaders said current market conditions do not threaten its ability to manage debt. Executives also used the latest earnings call to address long-term risks tied to Bitcoin, including quantum computing.

Bitcoin Accounting Loss Drives Strategy’s Q4 Results

Speaking during a fourth-quarter results webinar, Strategy CEO Phong Le said the company’s balance sheet can withstand a deep and prolonged decline in Bitcoin. He explained that BTC would need to fall to around $8,000 and stay there for five to six years before debt obligations become a serious issue. 

Le noted that at $8,000, the value of Strategy’s Bitcoin holdings would roughly match its net debt. At that point, BTC reserves could no longer fully cover convertible notes. Management would then consider restructuring, raising equity, or issuing new debt. The CEO framed that outcome as an extreme case rather than a likely one.

Strategy reported a $12.6 billion quarterly net loss, largely driven by unrealized losses on its digital asset holdings. CFO Andrew Kang said the loss was driven by quarter-end Bitcoin prices and that the company remains focused on long-term execution despite price swings.

Executive Chairman Michael Saylor supported that view, saying sharp quarter-to-quarter moves can unsettle investors but do not change the company’s core plan. According to Saylor, Strategy was built to survive severe market cycles and short-term stress. 

Michael Saylor Says Bitcoin Faces No Immediate Quantum Computing Risk

During the call, Saylor said concerns that quantum computing could harm Bitcoin are overblown. He explained that most experts do not see any real threat for at least another decade.

The executive chairman further argued that quantum computing would affect many industries before Bitcoin, explaining that they all rely on the same cryptography. Saylor pointed to ongoing investment in quantum-resistant technology and said Bitcoin could adapt through community agreement.

He said Bitcoin can be updated if needed, but any change would require agreement across the global network. Saylor warned that moving too early could create new problems and not reduce them. No shared view currently exists that existing cryptography is at immediate risk.

To prepare for future challenges, Saylor announced a new Bitcoin Security program under Strategy. The initiative aims to coordinate with cyber, crypto, and Bitcoin security groups worldwide. Its goal is to support research and discussion around potential upgrades.

“The company is well managed, well collateralized, and responsibly structured so that we can stand difficult months, difficult quarters, even difficult years or two or three-year cycles at a time. We’ve done it before, and we’re prepared to do it going forward.” 

Michael Saylor said.

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