Amidst the instabilities of the market and the threats of Bitcoin falling, questions have arisen about whether the bitcoin bet carried out by MicroStrategy and Michael Saylor can eventually crash the market. This question, which had been in the air for so long begging for an answer, has been eventually addressed by Sam Martin and Will Clemente of Blockworks Research and Reflexivity Research, respectively.
What Will Be The Fate Of The Crypto Market?
Following the collapse of the market, especially since the fall of the famous crypto exchange, FTX, things have not been all rosy for the crypto industry.
Also, since the speculations of a possible bankruptcy case involving Digital Currency Group (DCG) and Genesis Global Trading have come up, strong predictions have arisen that the price of bitcoin may continue to fall even harder.
Top on the list of these predictions is that of the famous economist, Nouriel Roubini, who took to his Twitter page to state that Bitcoin will dip further, especially after the purported fall of DCG.
The questions that have arisen seeing the bitcoin bet carried out by Michael Saylor and Microstrategy, the American software company, are whether it is capable of crashing the market even further.
Also read:This question has been answered by Sam Martin and Will Clemente in a report made public recently.
MicroStrategy, which was co-founded by Michael Saylor, is one of the largest holders of bitcoin. The company holds about 130,000 BTC and even took out a loan of $2.37 billion to purchase bitcoins at a rate of $30,000 each.
According to the report, the convertible notes do not have a really high rate of interest for MicroStrategy owing to the fact that they were initially issued at a convenient conversion rate.
Also, they cannot be converted to stocks until June 15, 2025, and August 15, 2026, unless in extreme cases like when the ownership of the company is transferred or when it is acquired or delisted.
There Is A Potential Risk
Since the convertible notes are not at a really major risk owing to the fact that Saylor possesses about 67.7% of the voting rights of the company, the attention then falls on the 2028 secured notes.
Because of its high-interest rates and a host of other reasons, such as the fact that they hold down about 11.5% of the total BTC holdings, the convertible notes could pose a significant threat if the maturity date is tampered with.
However, the research has pointed out that even though it is not immediate, the threat is real, and the company needs to do well to successfully avoid the risk in the future.
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