2028: A Crucial Test for Strategy Amid Nasdaq 100 Stability

Even though MicroStrategy (MSTR) continues to hold its position in the Nasdaq 100 index, the sustainability of its business model is under scrutiny. New analysis indicates that 2028 will be a decisive year for the company's survival.

Key Takeaways

MicroStrategy has a significant Bitcoin position that can affect the market.
2028 is identified as a critical year due to significant redemption risks.
The company has primarily invested in Bitcoin instead of cash-generating assets.
There is an increasing bankruptcy threshold that could impact its survival.
MicroStrategy's retention in the Nasdaq 100 has raised questions about its business model.

MicroStrategy now possesses a Bitcoin stake substantial enough to impact the wider market, far exceeding the holdings typical of large investors, often referred to as "whales."

Analyzing the Risks: 2028 as the Crucial Year

According to Tiger Research, a blockchain-focused research firm, 2028 marks a pivotal risk point for MicroStrategy due to its financial strategies. The firm's report sheds light on a significant shift in how MicroStrategy has raised its capital.

Until 2023, the company mainly banked on cash reserves and minor convertible notes, maintaining its Bitcoin holdings around the low 100,000 BTC range. However, beginning in 2024, MicroStrategy dramatically increased its leverage through preferred equity, ATM programs, and substantial convertible offerings. This strategy established a feedback loop; as Bitcoin prices increased, it allowed for even more purchases of Bitcoin.

A concerning aspect of this strategy is that the call options on these convertible bonds are heavily weighted towards 2028, leading to an anticipated $6.4 billion in redemption pressure. Investors have the right to demand repayment early, and the company has no means to deny these requests.

Liquidity Challenges and Lack of Safety Nets

Tiger Research emphasizes a crucial vulnerability in MicroStrategy's business: the company has used nearly all raised capital to buy Bitcoin instead of investing in cash-generating assets.

“As noted in the report, if the funds had been allocated towards productive assets, the company would have had a natural source of repayment. Instead, their singular focus on Bitcoin accumulation leaves little liquidity available for redemption demands.”

Should refinancing opportunities fail in 2028, MicroStrategy may need to sell roughly 71,000 BTC at a price of $90,000 each. This would represent about 20-30% of the daily Bitcoin trading volume, which could potentially trigger a downward spiral across the market.

Rising Bankruptcy Thresholds

As of 2025, MicroStrategy's static bankruptcy threshold stands at $23,000, which indicates a need for a 73% price decline for bankruptcy to be triggered. However, this threshold has been steadily climbing from $12,000 in 2023 and $18,000 in 2024 due to the rapid growth of its debt outpacing Bitcoin acquisitions.

“While MicroStrategy's structural risk seems manageable under normal conditions, it becomes extremely concentrated as we approach 2028,” cautioned Tiger Research. “If refinancing fails, the sheer selling pressure could adversely affect the entire Bitcoin market.”

The report further highlights that newer digital asset treasury firms face even greater risks, lacking the safety frameworks that MicroStrategy has built through surviving the downturn in 2022.

Nasdaq 100 Stability Amid Uncertainty

Recently, MicroStrategy successfully avoided removal from the Nasdaq 100 during its regular index rebalancing announced last weekend. Nonetheless, the global index provider MSCI is set to evaluate MicroStrategy's position in January. Some observers believe that the company’s buy-and-hold Bitcoin model aligns more closely with investment funds rather than traditional technology companies.

MicroStrategy was a pioneer in establishing the corporate Bitcoin treasury model back in 2020, which has led to numerous imitations worldwide. However, as Bitcoin volatility adversely impacts share prices—resulting in a 47% decline over the last three months—doubts are growing about whether this leveraged investment can meet its impending debt obligations.