Bitcoin is being pushed by banks into a downward death spiral

MicroStrategy, as a listed Bitcoin whale in the US stock market, holds approximately 650,000 BTC with a total holding value of over $59 billion. Its stock price is highly correlated with Bitcoin's price; buying this company's stock is essentially like holding a highly leveraged Bitcoin ETF. But behind this glamorous holding is the company's tight financial situation: only $1.44 billion in cash, with liabilities reaching as high as $16 billion, and annual interest and preferred stock dividends totaling about $800 million. Calculations show that the current cash reserves can only cover 21 months of expenses.

Once cash runs out, MicroStrategy's options will depend entirely on the ratio of market capitalization to the net value of Bitcoin assets (nf): when this value is greater than 1, it means the company's market value exceeds the value of its Bitcoin holdings, indicating a market valuation premium. At this point, the company will choose to sell stocks for cash to repay debt and pay dividends; when the ratio is less than 1, meaning the company's market value is below the value of its Bitcoin holdings, selling more valuable Bitcoin becomes the better solution.

This is the core logic of the "death spiral": if nf drops below 1, MicroStrategy is forced to sell Bitcoin → Bitcoin price drops accordingly → the company's market value shrinks in tandem with Bitcoin's price → nf further declines → triggering a new round of Bitcoin selling, and a vicious cycle begins. Some conspiracy theories suggest that all of this may be a deliberate layout by big banks — shorting MicroStrategy to lower its market value, ultimately allowing them to buy Bitcoin at a low price.