Bitcoin

“Red Friday” marked the largest liquidation event in crypto history, nearly $19 billion erased in a single day amid renewed U.S., China trade tensions. Yet what makes this episode remarkable is not the size of the sell-off but its limited effect: Bitcoin fell only about 8%, a far cry from the 58% crash of March 2020 or the 19% slide after FTX collapsed in 2022. For the first time, the market absorbed massive leverage unwinding without imploding. The combination of deeper liquidity, institutional participation, and new instruments such as ETFs has begun to tame the asset’s once-violent swings. ...

​In the article, Dave Wang examines MicroStrategy’s aggressive Bitcoin acquisition strategy, which has raised concerns among critics who liken it to a Ponzi scheme. Since August 2020, MicroStrategy has been accumulating Bitcoin, funding these purchases through new debt and equity, leading some to question the sustainability and legitimacy of this approach. Critics argue that MicroStrategy’s continuous Bitcoin accumulation, financed by issuing new shares and taking on debt, resembles characteristics of a Ponzi scheme, where returns for earlier investors are generated through the capital of newer investors. This strategy has sparked debates within the financial community, with some analysts expressing skepticism about the company’s long-term viability under this model ...

MicroStrategy holds 499,096 Bitcoins, valued at approximately $43.7 billion, funded by $8.2 billion in debt. This strategy follows a cycle: issuing convertible notes at 0% interest, buying Bitcoin to drive its price up, selling new shares at a premium, and acquiring more Bitcoin. However, this approach depends on the continuous appreciation of Bitcoin to remain sustainable. MicroStrategy’s debt structure includes convertible notes maturing between 2027 and 2032, with clauses that could trigger early repayment in case of a “fundamental change.” If Bitcoin’s price drops significantly, the company’s assets could fall below its liabilities, potentially prompting shareholders to push for liquidation to protect their interests. ...