CryptoQuant CEO Debunks MicroStrategy Bitcoin Liquidation Fears

At the heart of Ki Young Ju’s argument lies a fundamental correction to how markets perceive MicroStrategy’s convertible debt structure. The CryptoQuant founder directly addresses the most common fear among critics—that convertible notes missing their conversion price would trigger forced Bitcoin liquidation. “Convertible debt not reaching the conversion price is not liquidation,” Ju stated in his November 20, 2025 social media post. “It simply means the notes get repaid in cash […] Failing to convert is not a bankruptcy trigger. It is just normal debt maturity.”

This clarification reframes the entire conversation around MicroStrategy’s financial obligations. Rather than representing an automatic liquidation event, Ju explains that when equity remains below the strike price at maturity, the embedded option expires and the instrument reverts to straight debt. The repayment pathways available to the company are conventional corporate finance tools: refinancing existing debt, rolling into new notes, secured borrowing, or utilizing operating cash flow. This structural understanding separates MicroStrategy from margin traders who face automatic liquidation triggers during price declines.

Beyond the mechanical aspects of debt instruments, Ju grounds his confidence in MicroStrategy’s governance structure and corporate identity. “Saylor would never sell Bitcoin unless shareholders want it,” Ju wrote, adding a stark warning that “selling even a single BTC would destroy MSTR’s identity as a Bitcoin treasury company and trigger a death spiral for both Bitcoin and MSTR.” This perspective highlights how MicroStrategy’s shareholder base has specifically invested in the company as a Bitcoin treasury vehicle, making voluntary divestment politically and strategically improbable without a radical shift in investor preference.

The company has repeatedly defined itself as a BTC-treasury vehicle, and its transformation under Michael Saylor’s leadership has attracted investors seeking Bitcoin exposure through traditional equity markets. This alignment between corporate strategy and shareholder expectations creates a powerful disincentive against Bitcoin sales, even during periods of market stress. The very identity that makes MicroStrategy valuable to its investors would be compromised by any Bitcoin divestment, creating what Ju characterizes as a “death spiral” scenario where both the company’s stock and Bitcoin itself could suffer significant damage.

The quantitative foundation supporting Ju’s argument rests on MicroStrategy’s substantial Bitcoin holdings and their relationship to the company’s debt obligations. As of October 30, 2025, the company reported holding 640,808 BTC acquired for approximately $47.44 billion, with subsequent November additions bringing total holdings to roughly 649,870 BTC. Even after accounting for the growing convertible and preferred share layers, the BTC treasury remains the dominant asset on MicroStrategy’s balance sheet.

Ju acknowledges that MicroStrategy’s equity is not risk-free, stating “This does not mean MSTR’s stock price will always stay high.” However, he categorically rejects the notion that the company would sell BTC to support its stock price or face imminent bankruptcy. In his most extreme scenario analysis, Ju contends that even at a Bitcoin price of $10,000 per coin—representing a catastrophic decline from current levels—MicroStrategy would face “a debt restructuring, nothing more.” Regarding preferred shares, he notes that dividend obligations have not been missed and can be covered through new share issuance, which while dilutive to existing shareholders, does not represent a liquidation vector.

The CryptoQuant CEO draws a clear distinction between using Bitcoin as collateral—which he describes as a “last resort” because it introduces real margin risk—and the current structure where Bitcoin serves as the company’s primary treasury asset. This distinction is crucial for understanding why current market conditions, including Bitcoin’s recent retracement to $82,050, don’t threaten MicroStrategy’s solvency. The company’s liabilities, while substantial, don’t mechanically force BTC sales absent catastrophic market conditions far beyond typical volatility.