Corporate HODL Strategy Faces Ultimate Test: 2028 Could Be the Critical Threshold for MicroStrategy

Although MicroStrategy successfully maintained its position in the NASDAQ 100 index, its aggressive Bitcoin leverage strategy is raising deep market concerns. Recent analysis indicates that the company will face approximately $6.4 billion in convertible bond redemption pressure in 2028, which could be a critical test for its survival. If refinancing fails, the potential sale of 71,000 Bitcoins (estimated at $90,000 per Bitcoin) to repay debt would be sufficient to impact the liquidity of the entire Bitcoin market. Meanwhile, the MSCI index will also review its inclusion eligibility in January next year, raising fundamental questions about its business model.

MicroStrategy’s Business Model Under Scrutiny: Index Halo Cannot Mask Deep Risks

Despite volatile market conditions, MicroStrategy retained its spot in last weekend’s NASDAQ 100 index rebalancing, but this does not mean its business model is fully recognized. In fact, this company, known for its “Corporate Bitcoin Bond” model, is facing increasingly strict scrutiny from traditional financial systems. Global index provider MSCI is scheduled to review its constituent eligibility in January next year, with some market observers sharply pointing out that its “buy and hold” Bitcoin operation resembles a closed-end investment fund more than a technology company with ongoing cash flows.

This skepticism is not unfounded. Since MicroStrategy pioneered this model in 2020, dozens of imitators have emerged worldwide, but the core question remains unresolved: how can a company sustain long-term operations when it almost entirely allocates its financing to purchasing a highly volatile asset that does not generate cash flow? Especially during periods of significant Bitcoin price fluctuations and declining stock prices—MicroStrategy’s stock has fallen 47% over the past three months—whether this leveraged gamble can withstand upcoming massive debt obligations has become a top concern for investors.

Market anxiety continues to ferment. While MicroStrategy holds a dominant position in the crypto world with its large Bitcoin holdings (now reaching a “whale” level capable of influencing the market), traditional financial valuation systems focus more on stable business models and debt repayment capacity. As the critical 2028 milestone approaches, conflicts between its business model and capital market rules will become increasingly apparent.

2028 Life-and-Death Test: $6.4 Billion Debt Wall Looms

Blockchain research firm Tiger Research, in its latest in-depth report, explicitly marks 2028 as the critical point of structural risk for MicroStrategy. The report reveals a key shift in its financing strategy: before 2023, MicroStrategy mainly relied on cash reserves and small convertible notes, keeping its Bitcoin holdings below 100,000 coins. However, starting in 2024, the company significantly increased leverage by combining preferred stock, at-the-market (ATM) issuance plans, and large-scale convertible bond offerings.

This aggressive strategy creates a “feedback loop”: Bitcoin prices rise, increasing the value of collateral assets, enabling the company to borrow more to buy more Bitcoin. However, the fatal flaw of this cycle is that the redemption rights (Call Options) attached to the large amount of convertible bonds issued are heavily concentrated in 2028. At that time, bondholders will have the right to demand early redemption, which MicroStrategy cannot refuse, creating a concentrated repayment pressure of about $6.4 billion. Without sustainable operational cash flow, this is undoubtedly a steep “debt wall.”

Tiger Research Core Risk Data Overview

• Key risk point: 2028 (concentrated maturity of convertible bond redemptions)
• Repayment pressure scale: approximately $6.4 billion
• Potential sell-off scale: about 71,000 Bitcoins (assuming $90,000 per Bitcoin)
• Market impact estimate: equivalent to 20% to 30% of daily trading volume at that time
• Static bankruptcy threshold: Bitcoin price drops to $23,000 (based on 2025 data)
• Bankruptcy threshold change: rising from $12,000 in 2023 to $18,000 in 2024

Deadly Cash Flow Shortage: Repayment Capacity Fully Market-Dependent

Tiger Research’s report sharply points out MicroStrategy’s fundamental vulnerability: the company has invested nearly all raised capital into Bitcoin purchases rather than into operational assets that generate sustainable cash flow. The report states: “If these funds were allocated to productive assets, the company would have a natural source of repayment. However, by focusing on Bitcoin accumulation, little cash remains for redemptions.” This means the company’s debt repayment ability is almost entirely dependent on Bitcoin market performance and its refinancing capacity.

This “all-in” strategy can amplify gains during bullish cycles but becomes extremely risky during liquidity crunches or market downturns. The report warns that if refinancing channels are blocked in 2028, MicroStrategy will be forced to sell about 71,000 Bitcoins (estimated at $90,000 each) to meet debt obligations. Such a large-scale concentrated sell-off would account for 20% to 30% of the global Bitcoin daily trading volume at that time, likely triggering a chain reaction that causes a spiral of market decline, further worsening the company’s financial situation.

It is also noteworthy that the report points out that emerging digital asset treasury companies that imitate MicroStrategy’s model in late bull markets are at higher risk. They lack the multi-layered safety mechanisms and market experience MicroStrategy built after the 2022 market winter, making them more vulnerable to risks.

Market Impact and Industry Insights

MicroStrategy’s case provides a highly cautionary example for the entire crypto industry, especially in the field of corporate asset allocation. It shows that even holding core crypto assets, excessive leverage and neglecting cash flow generation can lead to catastrophic impacts at certain points. For investors, this serves as a reminder that when evaluating “Bitcoin-holding companies,” one must not only look at their holdings and “faith,” but also rigorously examine their balance sheet structure, debt maturity distribution, and potential liquidity risks.

For the market, the potential sell-off pressure faced by MicroStrategy in 2028 is a long-term risk that needs to be pre-absorbed. It reminds market participants that while Bitcoin as a corporate asset has gained some acceptance, its high volatility and the rigid debt structures of traditional companies create inherent tensions. Future more prudent corporate holding models may need to explore generating yields through staking, lending, or allocating part of their funds to cash-flow-generating Web3 infrastructure projects to build healthier balance sheets.

Currently, the static bankruptcy threshold for MicroStrategy is a Bitcoin price of $23,000, leaving about 73% downside from current levels, seemingly providing a sufficient margin of safety. However, the report emphasizes that this threshold is continuously rising as debt grows faster than Bitcoin accumulation. Ultimately, the market’s judgment will come in 2028, testing whether this epic “corporate Bitcoin experiment” is a model of financial innovation or the endgame of leverage games.