Strategy won’t face Bitcoin liquidation in the next bear market: Willy Woo
Bitcoin analyst Willy Woo predicts that Michael Saylor’s company, MicroStrategy (MSTR), is unlikely to undergo Bitcoin liquidation in the next bear market due to its convertible senior notes debt structure, which allows flexibility in repayments. Woo stated that MSTR would need Bitcoin to be valued at $91,502 by 2027 to avoid selling Bitcoin to cover $1.01 billion in debt and suggested that any liquidation would require significant underperformance of Bitcoin. While Woo doesn’t foresee liquidation in the 2024 bear market, he highlighted a potential partial liquidation during the 2028 bull market if Bitcoin's growth isn't adequate. MicroStrategy holds around 641,205 BTC, valued at $64 billion, despite its stock and Bitcoin recently experiencing declines. Industry executives predict substantial Bitcoin growth by 2030, with some forecasting it could reach $1 million.
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MSTR's Bitcoin Strategy and Debt Overview
Michael Saylor’s company, Strategy (MSTR), won’t have to liquidate its Bitcoin holdings in the next major crypto market downturn, according to Bitcoin analyst Willy Woo. In a statement shared on Wednesday through an X post, Woo expressed confidence, saying: “MSTR liquidation in the next bear market? I doubt it.”
Strategy's debt primarily consists of convertible senior notes, allowing the company to settle its debt using cash, common stock, or a combination of both. This flexibility provides a safeguard for the company during market fluctuations.
Key Debt Obligations Facing Strategy
In preparation for the Sept. 15, 2027, holder put right date, Strategy will face around $1.01 billion in debt due. Avoiding a sell-off of its Bitcoin holdings to meet this obligation will require its stock to trade above $183.19 per share, according to Woo. This price correlates with a Bitcoin price of approximately $91,502, assuming a multiple net-asset-value (mNAV) of 1, Woo noted.
Analyst Insights on Bitcoin’s Market Performance
Bitcoin analyst The Bitcoin Therapist added further optimism, suggesting that “Bitcoin would have to perform horribly” for Strategy to encounter a situation requiring Bitcoin sell-offs. They emphasized that it would take a significant and prolonged bear market to force liquidation, which they find unlikely.
Currently, Strategy holds around 641,205 Bitcoin, valued at approximately $64 billion as per the Saylor Tracker at the time of publication.
Recent Price Movements of Strategy Stock and Bitcoin
Despite these assurances, Strategy’s stock has faced notable declines. On Tuesday, the stock closed at $246.99, marking a seven-month low and a drop of nearly 6.7% on the day.
Meanwhile, Bitcoin itself has seen a 9.92% decline over the past seven days, trading at $101,377 according to CoinMarketCap.
Possibility of Partial Liquidation in 2028
Willy Woo provided a cautious note regarding the possibility of partial liquidation during the projected 2028 bull market. He explained that if Bitcoin doesn’t experience a strong rally during that period, Strategy could face partial liquidation. Woo stated, “Ironically, there’s a chance of a partial liquidation if BTC doesn’t climb in value fast enough in an assumed 2028 bull market.”
Long-Term Optimism for Bitcoin’s Value
Despite these near-term concerns, optimistic forecasts remain for Bitcoin’s long-term value. Prominent figures like ARK Invest CEO Cathie Wood and Coinbase CEO Brian Armstrong predict that Bitcoin could reach $1 million by 2030.