Analyst: MicroStrategy shifts to defensive BTC buying, but risk is limited

Cryptocurrency analyst Axel Adler Jr. has assessed that MicroStrategy (Nasdaq: MSTR) has shifted from an aggressive BTC accumulation strategy to a defensive buying approach, but its risks are limited. He explained that while MSTR is down 78% from its peak, BTC has fallen 51%. Adler noted that although this is less than MSTR's 89% drop during the 2022 bear market, the current trend is similar. Recently, MicroStrategy has reduced the size of its BTC purchases, increased its dollar reserves, and became a net seller of BTC for the first time since 2022. Adler believes that given the company's dollar holdings, its structural risk is limited. However, he added that the biggest risk at present is BTC's failure to recover to MicroStrategy's average purchase price of $75,000 for an extended period. This could cause the MSTR premium to collapse and make further fundraising difficult. A key variable going forward, he said, will be whether the company transitions to directly selling BTC to cover preferred stock dividends and bond interest payments.