A thunderclap! MicroStrategy clearly sets the bottom line for Bitcoin sales: mNAV falls below 1 and financing is cut off.

Phong Le, CEO of MicroStrategy, the world's largest corporate Bitcoin holder, clearly articulated the stringent trigger conditions for selling Bitcoin for the first time: it will only be considered if the stock price falls below the net asset value (mNAV falls below 1) and the company is unable to finance through equity or debt. In the face of an annual preferred stock dividend pressure of $750 million to $800 million, the company insists on issuing stock at a premium to pay, viewing Bitcoin sales as a “last resort” to protect shareholder value. At the same time, the company launched the “BTC Credit Dashboard” to demonstrate to investors that even if Bitcoin falls to $25,000, its financial structure remains robust and its long-term holding strategy is unwavering.

“Last Resort” Policy: Defining Clear Boundaries for the “Forever Holding” Myth

In a recent interview with the podcast “What Bitcoin Did”, MicroStrategy CEO Phong Le added an unprecedented key note to the company's long-standing “Bitcoin bond strategy”. He made it clear for the first time that the sale of Bitcoin would be strictly limited to a “last resort”, triggered by two conditions being met simultaneously: first, the company's stock price falls below its adjusted net asset value, meaning the mNAV ratio drops below 1; second, the company is unable to raise funds from external capital markets by issuing new shares or bonds. This statement provides unprecedented clarity for the market's understanding of MicroStrategy's bottom line.

mNAV is the core of understanding this policy. It represents the ratio of the company's market value to its Bitcoin holdings value. As long as mNAV is greater than 1, it means the market gives the company's stock a premium relative to its Bitcoin assets. The company can raise funds by issuing new shares at a premium to continue purchasing Bitcoin or paying dividends, thus forming a growth flywheel of “issuing shares - purchasing Bitcoin - increasing Bitcoin content per share.” Le emphasized that as long as this virtuous cycle continues, selling Bitcoin is unnecessary and even a strategic regression. Only when this flywheel comes to a complete stop - when the stock price falls below asset value and the capital market doors close - will the company use its “ultimate reserve.”

This policy clarification is of great significance. It means that, despite facing immense pressure from dividend payments, the management of MicroStrategy still considers Bitcoin as a core strategic asset that would only be utilized under extreme conditions, rather than a liquidity reserve that can be traded at will. This qualitative stance served to stabilize the market during a sensitive period when Bitcoin prices experienced significant fluctuations and there were concerns that institutions might sell off. It conveys a clear message to the market: unless confronted with an extreme situation akin to a “survival crisis”, this largest corporate supporter of Bitcoin will not become a seller in the market.

MicroStrategy Bitcoin strategy key financial data

• Annual Dividend Obligation: 750 million to 800 million USD (from issued preferred stock)
• Bitcoin holdings: The largest corporate holder in the world, approximately 649,000 coins.
• Average Holding Cost: Approximately 74000 USD
• Core Operating Model: Issue stock financing when the stock price is at a premium (mNAV > 1) for the purpose of purchasing coins or paying dividends.
• Selling Trigger Conditions: mNAV < 1 and unable to finance through equity/debt (“last resort”)
• Stress Test Bottom Line: Financial models show that even if Bitcoin falls to 25000 USD, it can still meet dividend obligations.

When the “last resort” is triggered: What should the market be concerned about?

The “apocalyptic scenario” sketched by Phong Le is harsh but not unimaginable, especially in a prolonged bear market or during extreme black swan events. The mNAV ratio essentially reflects the market's expectations for Bitcoin's future price and the management team's execution capability. If Bitcoin's price remains depressed for an extended period, and the company's stock price continues to decline due to performance or market sentiment, the mNAV may indeed slide toward the warning line of 1. If this coincides with a global liquidity tightening or a complete closure of financing avenues for crypto-related companies in the capital markets, then the theoretical “last resort” may come to the table.

However, analyzing the actual impact of this scenario requires considering several key factors. The first is the scale of the sale. Le's statement is “to sell a portion of Bitcoin to protect shareholder value,” which means that even if the triggering conditions are met, the sale is likely to be limited and tactical, aimed at raising the necessary funds to get through difficulties, rather than a liquidation-style sell-off. Considering its holding size of up to 56 billion dollars, a small percentage of the sale would have a controllable impact on market liquidity. The second is market expectations. Since the company has clearly defined the rules in advance, this potential risk has already been partially priced in. When mNAV truly approaches 1, the market may have fully digested this expectation, and the actual sale may not necessarily lead to additional panic selling.

What is even more intriguing is that this policy itself may constitute a “reflexive” loop. The mNAV approaching 1 can exacerbate market concerns, leading to pressure on stock prices, which may potentially self-fulfill the decline of mNAV. To avoid falling into this trap, MicroStrategy must continue to earn the market's “trust premium” through strong performance, clear communication (such as the newly launched dashboard), and steadfast maintenance of the long-term narrative around Bitcoin. Therefore, the announcement of the “last resort” clause is less a risk and more a way for management to demonstrate its discipline and transparency to the market after extreme stress testing.

BTC Credit Dashboard: How Transparency Becomes the New “Moat”?

To address recent market fluctuations and the accompanying investor concerns, MicroStrategy has launched an innovative dashboard called “BTC Credit.” The core purpose of this tool is to demonstrate the company's financial resilience under various market scenarios to investors with unprecedented transparency and dynamic simulation. It is not merely a display of holdings, but rather a complex financial model visualization interface that details the company's ability and timeline to cover its dividend obligations at different Bitcoin prices.

According to Le's explanation, the dashboard reveals a key conclusion: even if the Bitcoin price maintains around the average cost line of 74000 USD for a long time or even falls to 25000 USD, the company's existing financial structure and cash flow arrangements can still support its commitment to dividend payments for many years without touching its Bitcoin reserves. This is equivalent to a public “stress test” for the market, aimed at thoroughly dispelling speculation that “MicroStrategy may be forced to sell due to short-term funding pressure.” This proactive, data-driven transparency is a model among crypto-related publicly listed companies.

From a strategic perspective, this dashboard is constructing a new type of “moat”. In traditional industries, a moat may be brand, cost, or technology; while in the “corporate Bitcoin bond” model pioneered by MicroStrategy, financial transparency, robustness, and the credibility of long-term commitment have become its most critical competitive advantages. By publicly demonstrating its resilience to all investors (whether supporters or skeptics), the company attempts to distinguish itself from imitators that may fall during volatility due to excessive leverage or poor planning. The message it conveys is: MicroStrategy not only believes in Bitcoin but also possesses the mature ability to manage this belief with the highest financial discipline.

Long-termism vs. Short-term Pressure: Strategic Resolve and Flexibility

Despite setting a bottom line for sales and demonstrating financial resilience, it is undeniable that the rigid dividend payments of $750 million to $800 million each year hang over MicroStrategy like the “Sword of Damocles.” This enormous expenditure stems from the perpetual preferred stock the company previously issued to quickly raise funds for coin purchases. Le acknowledges that this expenditure is a pressure, but he emphasizes that they will continue to make payments even in a bear market, as it is the cornerstone of building long-term investor confidence. The act of paying dividends itself is a pledge to the sustainability of the company's business model.

The company's response strategy reflects a combination of principles and flexibility. The principle is embodied in its unwavering belief in the long-term value of Bitcoin. Le reiterated that Bitcoin, as a non-sovereign, global, and limited-supply asset, has universal and lasting appeal. The core goal of the company is not to trade Bitcoin, but to maximize “the Bitcoin content per share” and share in its long-term appreciation dividends. Flexibility is reflected in the diversification of financing methods. When the stock price is at a premium, issuing common stock for financing is the preferred option; only in dire circumstances, and to avoid excessive dilution of equity, would it reluctantly consider selling a small amount of Bitcoin.

This strategy of “primarily holding for the long term, with adjustments for extreme situations” is redefining the relationship between enterprises and volatile assets. It is different from traditional corporate cash management (which seeks safety and liquidity) and also different from hedge fund speculative trading (which seeks short-term gains). MicroStrategy attempts to prove that a publicly traded company can treat a high-volatility asset as its core strategic reserve and, through a sophisticated capital structure and steadfast execution, convert short-term volatility risks into long-term shareholder value. This process itself is a highly watched financial experiment.

Conclusion: A Public Experiment on Faith and Discipline

MicroStrategy has explicitly defined its “last resort” clause for Bitcoin sales for the first time, marking a crucial turning point. This means that this pioneer, which has deeply tied its corporate fate to Bitcoin, is transitioning from a purely “faith-based preaching” phase to a more mature “strategic management and risk communication” phase. It is no longer just saying “We believe in Bitcoin,” but is beginning to explain to the world in detail “how we smartly manage risks, fulfill responsibilities, and maintain survival under the right belief.”

For the entire cryptocurrency market, MicroStrategy's transparency is a valuable gift. It enables the market to more rationally assess the potential impact of companies holding Bitcoin, reducing unnecessary speculation and panic. It also sets a high standard for newcomers: companies venturing into crypto assets must be prepared to respond to scrutiny from the public and capital with the same rigor and transparency.

Ultimately, the success or failure of MicroStrategy will not only depend on the rise and fall of Bitcoin prices but also on its ability to walk the tightrope between long-term faith and short-term financial discipline. Every step of this experiment is writing a textbook case for “how enterprises can embrace the era of digital assets.” And we are all witnesses to this grand financial experiment.