MicroStrategy (MSTR): Leverage, Bitcoin Volatility, and the Risk of Repeat Crashes

Reddit users view MSTR as a leveraged Bitcoin proxy (e.g., “3x BTC position with paperwork”) and debate whether Saylor’s aggressive financial engineering could trigger another crash. Key points: 50% drop since July 2025; concerns about BTC price risks impacting convertible notes/preferred dividends; divergent opinions on whether MSTR’s fate is now tied to BTC rather than independent crashes.

MSTR’s risk profile has shifted from past non-crypto crashes (e.g., 62% single-day drop in 2000 due to accounting scandals) to Bitcoin-focused volatility. It holds ~649,870 BTC (3% of total supply) at $74,433 average cost, financed via 30% preferred equity, convertible debt, and stock offerings. Recent risks: 30% monthly drop tied to BTC falling below $95k; mNAV below 1 (market no longer pays leverage premium); collateral call vulnerabilities [3,7].

Both Reddit and research confirm MSTR’s risk is now dominated by BTC volatility and leverage. Reddit’s 50% drop since July aligns with research’s 30% monthly decline (different timeframes). While Reddit questions Saylor’s ability to trigger independent crashes, research shows MSTR’s fate is tightly linked to BTC—reducing single-person risk but increasing market-correlated risk. The shift to preferred equity may mitigate some convertible debt risks but doesn’t eliminate leverage [2,7].

: Sharp BTC declines (e.g., below $70k) could trigger collateral calls; mNAV erosion may devalue shares; leverage spiral risk remains active [3,6].
: BTC rebounds could yield outsized gains from leveraged positions; retiring convertible notes by 2028-2029 may stabilize long-term finances [2,9].