Bitcoin chart and the U.S. dollar's DXY index is an unsettling contrast. As Bitcoin has hit new record highs, crossing the $120,000 boundary, the DXY has had a disappointing year — off just shy of 10% so far this year — and is forecasted to continue dipping in the near future. In this atmosphere, it's little wonder that increasing numbers of firms are looking to Bitcoin as a diversification asset to shore up their coffers. But this seemingly harmless trend can rapidly become a threat, not just to Bitcoin itself but to the broader financial system.
Summary
The story of Bitcoin flipped. From fighting regulators, BTC is now welcomed by states, institutions, and treasuries and the SEC relaxes.
Strategy's playbook is unconventional. Michael Saylor's first-mover advantage, cheap entry point, and concessional debt terms allow him to ride out the downturns others cannot.
If a few leveraged companies panic-sell, Bitcoin's relationship with ETFs, pensions, and governments may magnify market shock.
The lesson: Saylor's success is no template. Firms must build fundamentals rather than wager their balance sheets on volatile instruments.
Only a year ago, $100,000 for Bitcoin was still a distant dream, while crypto was battling U.S. regulators and struggling to recover its image after the disastrous collapse of 2022. But what a difference a year makes. Fast forward to today, and the SEC has dropped or settled the majority of its lawsuits against crypto firms and has signalled a far more accommodating stance. At the same time, Bitcoin is being more widely accepted as a reserve asset by several U.S. states as well as a number of governments in the emerging markets. The sentiment regarding Bitcoin has entirely shifted.
Not only that, but the performance of Strategy (previously MicroStrategy), the first corporate Bitcoin treasury in the world, has been spectacular. The company's stock price has risen almost 900% in the last two years, fueled almost exclusively by its aggressive accumulation plan for Bitcoin. Whereas most companies are struggling through tricky market conditions — from narrowing margins to flat growth — Michael Saylor is reaping the rewards of his earlier Bitcoin purchases. It is an appealing vision for other firms, given the fact that Strategy's initial raison d'être was enterprise software — a world away from the Bitcoin behemoth it is today. Most think that they can copy his success. They are, however, desperately wrong.
Saylor's safety net
There are a few reasons for this. To begin with, Michael Saylor enjoyed an enormous first-mover advantage, beginning his Bitcoin acquisition in August 2020. His average cost basis for purchasing BTC is just above $70,000, some 40% less than today's price. Consequently, he can comfortably ride out a substantial correction and has openly declared that he would do so.
Strategy currently possesses 601,550 BTC — a staggering 2.87% of the total supply. If we estimate Strategy's overall liabilities are somewhere in the range of $10-$11 billion in debt and equity repayments, this still puts the breakeven price at somewhere in the region of the $18,000 level, an utterly implausible sell-off for an asset now priced at near the $120,000 level.
Even so, because much of the buying was financed through convertible bonds, this debt can be restructured. And unlike an exchange or a trading company, Strategy isn't subject to forced liquidations. So, in reality, Saylor will hardly likely suffer from any future market decline.
Copycats beware
Other company treasuries aren't quite as lucky. GameStop, for instance, acquired 4,710 BTC in May of 2025 — roughly $513 million — probably at an average cost over $100,000. If it decides to keep doing this now, it'll be averaging in at an even higher rate. Other newcomers entering the market today, such as Spanish coffee chain Vanadi Coffee, are purchasing at similar or even higher rates.
Estimates of the BTC price peak for this cycle differ, but $150,000 is a common sufficient target. That's only maybe a 25% appreciation from here — but more significantly, the closer Bitcoin reaches to this amount, the higher the danger of a huge correction. Even prior to that, a 30–40% mid-cycle correction would not be out of the ordinary, especially because volatility has a tendency to increase toward the end of market cycles.
Michael Saylor won't blink an eye if or when this occurs, because he negotiated extremely favorable conditions on his financing — including a number of 0% convertible bond issues, and debt with long maturities and low conversion levels. Others, however, are taking much poorer terms in their rush to emulate the approach. Sequans Communications, for example, acquired $384 million for purchasing Bitcoin using a combination of below-market equity and secured convertible debt. The format amplifies risk for shareholders and exposes the company to risk if the price of Bitcoin declines.
A threat to stability
For such companies — and probably others yet to announce how much Bitcoin they hold — a 30–40% decline could result in pressure from shareholders, credit problems, or even forced sale. If enough of these entities are exposed and act simultaneously, they could flood the market with Bitcoin at precisely the wrong moment. We’ve already seen how large sales can rattle the market: in July 2024, when the German government sold more than 50,000 BTC seized from a piracy site, the price dropped sharply, and sentiment deteriorated for weeks.
In addition to an already profound correction, it could conceivably unlock a chain reaction of selling and a general rout, not just taking down the companies that made rash pivots but damaging the overall financial ecosystem as well. Whether Bitcoin enthusiasts like it or not, BTC is getting more and more involved with mainstream finance.
BlackRock's spot Bitcoin ETF is a $85 billion giant now, and institutional investors, from pension funds to hedge funds, are starting to allocate BTC into their portfolios. States and governments are looking into Bitcoin reserves. Once an asset achieves this degree of systemic exposure, irresponsible corporate investing turns into a financial stability concern.
And using Bitcoin as a desperate measure to prop up a faltering business segment is nothing short of irresponsible. With Bitcoin's continued volatility — even if it is less so than in previous cycles — things can fall apart rapidly. So rather than attempting to follow Michael Saylor's lead, companies would be wiser to concentrate on their products and services, their clients, and their planning — that's how they ready themselves for economic downturn.
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