Article by Lin Wanwan
Recently, holders of MSTR (MicroStrategy) may have been losing sleep.
This once-celebrated "Bitcoin central bank" has experienced a significant downturn in its stock price. As Bitcoin rapidly retraced from its historical high of $120,000, MSTR's stock price and market value have drastically shrunk, plummeting over 60%, and there is even a possibility that MicroStrategy could be removed from the MSCI stock index.
The price drop of cryptocurrencies and the halving of stock prices are merely superficial. What truly has Wall Street on edge is the increasing signs that MSTR is caught in a battle for monetary power.
This is not an exaggeration.
In recent months, many seemingly unrelated events have begun to connect: JPMorgan has been accused of significantly increasing its short position on MSTR; there have been delivery delays when users transfer MSTR stock from JPM; the derivatives market has frequently suppressed Bitcoin; discussions around "Treasury stablecoins" and "Bitcoin reserve models" have rapidly intensified;
And these are not isolated incidents.
MSTR is standing on the fault line of two American monetary systems.
On one side is the old system: the Federal Reserve + Wall Street + commercial banks (with JPMorgan at the core); on the other side is the emerging new system: the Treasury + stablecoin system + a financial system backed by Bitcoin as a long-term collateral.
In this structural conflict, Bitcoin is not the target but the battlefield. And MSTR is the key bridge in this conflict: it converts the dollar and debt structure of traditional institutions into Bitcoin exposure.
If the new system is established, MSTR is the core connector; if the old system remains solid, MSTR is the node that must be suppressed.
Thus, MSTR's recent crash is not merely a simple asset fluctuation; it is driven by three overlapping forces: the natural adjustment of Bitcoin prices; the inherent risk structure of MSTR; and the conflict spillover caused by the internal power shift within the dollar system.
Bitcoin has strengthened the future monetary framework of the Treasury while weakening that of the Federal Reserve. The government faces a difficult choice: if it wants to maintain the opportunity to accumulate at low prices, it needs to allow JPM to continue suppressing Bitcoin.
Therefore, the tactics targeting MSTR are systematic. JPMorgan understands these game rules very well because they set the rules. They have placed MSTR on the dissection table, clearly separating its veins (cash flow), bones (debt structure), and soul (market faith).
Here, we will break down the four potential "death poses" that MSTR may face, which are also four death warrants carefully prepared by the old order.
Pose One: Take Advantage of the Fire
This is the most intuitive and widely discussed model in the market: if BTC continues to plummet, MSTR's leverage amplifies, causing its stock price to keep falling, leading to a loss of refinancing ability, ultimately resulting in a chain collapse.
The logic is simple, but it is not the core issue.
Because everyone knows "if BTC drops too much, MSTR will have problems," but few know: to what extent must it drop for MSTR to go from "stable as a rock" to "unstable"?
MSTR's asset-liability structure has three key numbers:
Total BTC position exceeds 650,000 coins (approximately 3% of total Bitcoin supply)
Average position cost is about $74,400
Some debts carry implicit price risks (though not forced liquidation, they affect net assets)
Many stories claiming "MSTR will go to zero" treat it like a forced liquidation style of exchange contracts, but in fact: MSTR does not have a forced liquidation price, but it does have a "narrative forced liquidation price."
What does this mean?
Even if creditors do not force a liquidation, the market can crash its stock price. When the stock price falls to a certain level, it will no longer be able to issue debt or convertible bonds to continue to replenish its position.
The old forces at JPMorgan are collaborating to short MSTR through the U.S. stock options market. Their tactic is simple: take advantage of Bitcoin's retracement to aggressively sell MSTR, creating panic. Their only goal is to shatter Michael Saylor's myth.
This is MSTR's first potential explosion point: Bitcoin prices drop to a level where the outside world is no longer willing to lend it money.
Pose Two: Debt Collection at the Door
Before discussing convertible bonds, we first need to clarify how MSTR's CEO Michael Saylor performs his "magic."
Many novices think MSTR simply buys coins with the money it earns, but that's wrong. MSTR is playing a very bold "leveraged arbitrage game."
Saylor's core method is: issuing convertible notes, borrowing dollars, and buying Bitcoin.
This year, MSTR has raised a staggering $20.8 billion, a scale that is extremely rare in annual fundraising for U.S. listed companies. The sources of funds include $11.9 billion from common stock, $6.9 billion from preferred stock, and $2 billion from convertible bonds.
This sounds ordinary, but the devil is in the details.
These bonds offer investors very low interest rates (some even below 1%); why would investors buy them? Because these bonds include a "call option." If MSTR's stock price rises, creditors can convert the debt into stock and make a profit; if the stock price does not rise, MSTR will repay the principal and interest at maturity.
This is the famous "flywheel": issue debt to buy coins, the coin price rises, MSTR's stock price skyrockets, creditors are happy, the stock premium is high, and then issue more debt to buy more coins.
This is what is called "spiral ascent." However, wherever there is a spiral ascent, there must be a death spiral.
This explosion pose is called "forced deleveraging under liquidity exhaustion."
Imagine if, in some future year, Bitcoin enters a prolonged sideways period (it doesn't need to crash, just needs to be stagnant). At this point, old bonds mature. Creditors look and see: MSTR's stock price has fallen below the conversion price.
Creditors are not philanthropists; they are Wall Street vampires. At this moment, they will never choose to convert the bonds into stock; they coldly say, "Pay up. We want cash."
Does MSTR have cash? No. It has converted all its cash into Bitcoin.
At this point, MSTR faces a desperate choice: either borrow new debt to repay old debt. But due to the depressed coin prices and poor market sentiment, the interest on newly issued bonds will be frighteningly high, directly consuming that meager cash flow from its software business.
Or, sell coins to repay debts.
Once MSTR is forced to announce "selling Bitcoin to repay debts," it will be like launching a nuclear bomb into the market.
The market will panic: "The long position has surrendered!" Panic leads to a drop in coin prices, falling coin prices lead to a crash in MSTR's stock price, a crashing stock price leads to more bonds unable to convert to stock, and more creditors demanding repayment.
This is the "Soros-style" sniper moment.
This explosion pose is the most dangerous because it does not require a Bitcoin crash to trigger; it only needs "time." When the debt maturity date coincides with a market silence period, the sound of the funding chain breaking will be clearer than breaking glass.
Pose Three: Kill the Heart
If the second pose is "out of money," then the third pose is "out of faith."
This is currently MSTR's biggest hidden danger and the most overlooked blind spot by retail investors: the premium rate.
Let me do some math for you. If you buy one share of MSTR now, assuming you spent $100. But within that $100, there is actually only $50 worth of Bitcoin; what is the remaining $50?
It's air. Or, to put it nicely, it's "faith premium."
Why are people willing to pay double the price to buy Bitcoin?
Before the spot ETF, like BlackRock's IBIT, came out, it was because there were no options; compliant institutions could only buy stocks. After the spot ETF came out, people still bought it because they believed Saylor could "nurture coins" through issuing debt and outperform simple coin hoarding.
However, this logic has a fatal weakness.
MSTR's stock price is built on the narrative "I can borrow cheap money to buy coins." Once this narrative is broken, the premium rate will revert.
Imagine if Wall Street continues to suppress MSTR, and the White House also forces MSTR to give up its chips? What if the SEC suddenly issues a document stating "holding coins as a public company is non-compliant"? In that moment, everyone's faith will collapse.
This explosion pose is called "Davis Double Kill."
In that moment, the market will ask itself a soul-searching question: "Why should I spend $2 to buy something worth $1? Wouldn't it be better to buy BlackRock's ETF? They are still 1:1."
Once this thought becomes a consensus, MSTR's premium rate will quickly revert from the current 2.5 times, 3 times, to 1 time, or even drop to 0.9 times (a discount) due to its operational risks as a corporate entity.
This means that even if Bitcoin's price does not drop a penny, MSTR's stock price could be halved.
This is the collapse of the narrative. It is not as bloody as a debt default, but it is more heart-wrenching. You see that your Bitcoin hasn't dropped, but your MSTR in your account has shrunk by 60%, and you will question your life. This is called "killing the valuation."
Pose Four: Closing the Door to Beat the Dog
The fourth pose is the most hidden, least known, but also the most ironic.
What is MSTR desperately trying to do now? It is trying to increase its market capitalization, attempting to squeeze into more indices, such as the already included MSCI stock index and the Nasdaq, and even the S&P 500.
Many people cheer: "Once it enters the S&P 500, there will be trillions of passive funds that must buy it, and the stock price will become a perpetual motion machine!"
As the old saying goes, fortune and misfortune lie where they are hidden.
Because entering the U.S. stock index, MSTR is no longer a simple stock; it has become a screw in the structure of the U.S. stock financial system. Wall Street is shorting MSTR with one hand while releasing news of MSTR being kicked out of the index with the other, causing panic selling among retail investors.
MSTR has already lost its autonomy. It wants to use Wall Street's money, but instead, it is locked by Wall Street's rules.
It wants to leverage Wall Street's rules to rise, but it may ultimately die by Wall Street's rules.
Epilogue: The Fate of the Palace Struggle
Michael Saylor is a genius and also a madman. He has seen through the essence of fiat currency devaluation and seized the dividends of the times. He has transformed a mediocre software company into an ark carrying the dreams of millions of gamblers.
But the amount of Bitcoin he holds has far exceeded what this company can bear.
Many in the market are already speculating that the U.S. government may directly invest in MSTR.
The method could either be to directly exchange U.S. Treasury bonds for MSTR's equity or support MSTR in issuing preferred stock backed by the government, or even direct administrative intervention to forcibly enhance its credit rating.
The climax of this grand drama has not completely ended; the palace struggle between the new and old orders of American finance is still ongoing. MSTR's structure is fragile, making it susceptible to volatility and time.
As long as Wall Street tightens one of MSTR's screws, then any of the four poses mentioned above: price collapse, debt default, disappearance of premium, or index strangulation, could lead to a rapid imbalance in MSTR's structure.
Conversely, when the chain operates simultaneously, it could also become one of the most explosive targets in the global capital market.
This is the charm of MSTR, and it is also its danger.
Reference:
- Trump's Gambit: The Quiet War Between the White House and JPMorgan
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