Concerns surrounding MicroStrategy’s Bitcoin strategy and debt obligations have been labeled as exaggerated by Anthony Scaramucci, founder of SkyBridge Capital.
Speaking in an interview, Scaramucci dismissed the fears of a financial collapse tied to MicroStrategy’s substantial Bitcoin holdings and debt structure, explaining that only a prolonged and systemic Bitcoin crash spanning several years would destabilize the company.
Long-Term Debt Structure Shields MicroStrategy
MicroStrategy’s financial strategy has attracted attention due to its aggressive Bitcoin acquisitions, funded largely through convertible debt and equity sales. The company currently holds $46.02 billion worth of Bitcoin, with an unrealized profit of $18.9 billion.
Critics argue that Bitcoin price volatility could jeopardize MicroStrategy’s ability to service its debt, potentially leading to forced Bitcoin sales and market disruptions.
However, Anthony Scaramucci emphasized that MicroStrategy’s debt is structured for the long term, reducing the risk of immediate financial distress. “If you really study his balance sheet, he has long, long-term debt, and he has rolling long-term debt,” Scaramucci said, referring to Michael Saylor, MicroStrategy’s executive chairman. He added that a systemic Bitcoin crash would need to last six or seven years to pose a significant threat to the company’s financial stability.
Market Concerns About Bitcoin Price Volatility
MicroStrategy’s reliance on Bitcoin as a corporate asset has fueled skepticism among investors. The company’s shares have soared by over 400% this year, driven by Bitcoin’s record-breaking price surges.
However, Bitcoin price has recently retreated from its all-time high of $108,000, leading to renewed concerns about MicroStrategy’s exposure to market volatility.
Despite this, Anthony Scaramucci believes fears of forced Bitcoin sales are unfounded. “The narrative of him being forced to sell hundreds of thousands of tokens into the market, I think it’s a forced narrative,” he said. Scaramucci attributed this confidence to his Wall Street experience, adding that MicroStrategy’s debt structure is fundamentally different from situations like the 2008 collapse of Lehman Brothers.
MicroStrategy Temporary Halt to Bitcoin Purchases
Rumors have surfaced that MicroStrategy may pause Bitcoin acquisitions in January due to potential blackout restrictions on share or convertible debt issuance. Such blackout periods are common for publicly traded companies, often imposed around fiscal quarter closings to comply with insider trading regulations.
Speculation suggests that the restrictions could prevent Michael Saylor from issuing convertible debt to finance additional Bitcoin purchases. However, analysts believe the potential pause would have limited impact, given the company’s substantial existing Bitcoin holdings and its history of regulatory compliance.
MicroStrategy’s next earnings report is expected between February 3 and 5, 2025, with analysts predicting that any blackout period would span January or begin mid-month. The company’s inclusion in the NASDAQ 100 index on December 23 has also raised theories that internal recommendations may have prompted this move.
Bitcoin Outlook Remains Positive
While Bitcoin’s recent price retreat has sparked concerns, Anthony Scaramucci remains optimistic about the cryptocurrency’s long-term potential. He acknowledged that Bitcoin could experience corrections of 30% to 40% next year, possibly dropping to $60,000–$70,000.
However, he highlighted factors such as the introduction of Bitcoin exchange-traded funds (ETFs) and potential favorable legislation that could support Bitcoin’s price stability.
“Could it get to $18 trillion dollars in market cap? We believe that it could,” Scaramucci said, while cautioning that the path to such a valuation would not be linear. He also noted that Bitcoin’s growing adoption and institutional interest could continue driving its appreciation over time.
