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And as a small but vocal number of publicly listed companies race to amass as much as they can, it’s dividing traditional financiers more than ever before.MicroStrategy (now known as Strategy) was ahead of the curve when it began adding BTC to its balance sheet in 2020. Its aggressive purchases have mainly been funded by debt. With Bitcoin rallying by close to 700% over five years, the firm’s now sitting on billions of dollars in unrealized profits.Once a struggling and modestly successful business intelligence firm, its rebirth as a Bitcoin treasury company has proven hugely lucrative so far, and inspired no shortage of copycats. While some see this as something to celebrate, it also creates deep cause for concern.At the time of writing, Strategy holds more than 640,000 BTC — over 3% of this digital asset’s total supply of 21 million. It has paid an average price of $74,802 per coin, meaning Bitcoin’s value could fall by 30% and the company would still be in the black. That being said, this average price has shot up dramatically of late. Back in August 2024, it stood at just $36,821.Bitcoin (BTC)24h7d30d1yAll timeStrategy’s determination to continue buying BTC as it sits near record highs means its margins are continually diminishing. As a result, when the next inevitable bear market hits, the company’s financial position may deteriorate quickly. Bitcoin is famed for painful peak-to-trough crashes of up to 80%. Would executive chairman Michael Saylor be able to keep the lights on if history ends up repeating itself?Such a scenario played out in 2022, following on from FTX’s spectacular collapse. BTC contracted from $69,000 to $16,000 within 12 months. Strategy managed to persevere through this downturn without offloading any of its holdings — despite racking up $4 billion in paper losses. But given the company’s crypto stash has quadrupled since then, margin calls may be harder to ignore the next time around.Forced selloffs could have ramifications in multiple ways. For one, it could send Bitcoin into a death spiral, with investors panic selling as they digest the news. A lack of liquidity compared with traditional markets means a large dump from Strategy could cause outsized declines in BTC’s value. And given its stock often serves as a proxy for Bitcoin’s price, shares would plummet too. To make matters worse, the company joined the tech-heavy Nasdaq 100 last December, meaning millions of savers who track this index through ETFs could see their portfolios take a battering. Everyday consumers with no interest in crypto could indirectly suffer if the company implodes.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,840.20 +17.86 (+0.26%)Dow 3047,562.87 +40.75 (+0.09%)Nasdaq23,724.96 +143.81 (+0.61%)Russell 20002,479.38 +13.43 (+0.54%)VIX17.44 +0.53 (+3.13%)Gold3,996.50 -19.40 (-0.48%)PortfolioSign in to access your portfolioSign inTop gainersBHF Brighthouse Financial, Inc. 57.07 +11.38 (+24.91%)ILMN Illumina, Inc. 123.54 +24.53 (+24.78%)TWLO Twilio Inc. 134.88 +22.02 (+19.51%)TVTX Travere Therapeutics, Inc. 35.16 +5.51 (+18.58%)BFAM Bright Horizons Family Solutions Inc. 109.23 +16.95 (+18.37%)Top losersATGE Adtalem Global Education Inc. 98.02 -43.75 (-30.86%)SPSC SPS Commerce, Inc. 82.24 -21.65 (-20.84%)TBBK The Bancorp, Inc. 65.37 -11.83 (-15.32%)DXCM DexCom, Inc. 58.22 -9.98 (-14.63%)ABR Arbor Realty Trust, Inc. 10.09 -1.46 (-12.64%)Most activeNVDA NVIDIA Corporation 202.49 -0.32 (-0.16%)AMZN Amazon.com, Inc. 244.22 +21.36 (+9.58%)PFE Pfizer Inc. 24.65 +0.36 (+1.48%)OPEN Opendoor Technologies Inc. 7.77 +0.43 (+5.86%)ONDS Ondas Holdings Inc. 6.44 +0.15 (+2.38%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 110,013.16 +529.51 (+0.48%)ETH-USD Ethereum USD 3,866.28 +25.63 (+0.67%)BRK-B Berkshire Hathaway Inc. 477.54 -0.98 (-0.20%)XRP-USD XRP USD 2.50 +0.00 (+0.04%)BRK-A Berkshire Hathaway Inc. 715,740.00 -2,182.00 (-0.30%)Top economic events