Bitcoin continues to plunge, whether MSTR will be forced to sell becomes the focus.

Bitcoin is undergoing a severe stress test for institutional holdings. As its price drops below key psychological levels, approaching the cost line of major institutional holders such as MicroStrategy, market concerns over the liquidity of highly leveraged holders are rapidly heating up. Over the weekend, Bitcoin broke through the $80,000 mark, reaching its lowest level since April 7, 2025. This round of selling occurred against the backdrop of obvious market liquidity shortages, further intensifying Bitcoin's recent cumulative decline of more than 30%. Despite the downturn in market sentiment, MicroStrategy Executive Chairman Michael Saylor still posted a picture with the words “More Orange” on social media platform X on Sunday, hinting at continued accumulation. The company announced it would raise the dividend on its Series A perpetual preferred stock (STRC) by 25 basis points to 11.25%, intending to attract capital with high financing costs to sustain its Bitcoin buying strategy. However, analysts note that if the Bitcoin price continues to stagnate or drop below its cost line, hefty dividend payments could trigger severe cash flow pressure. Bianco Research macro strategist Jim Bianco points out that the Bitcoin market is facing a crisis of narrative exhaustion. The current market structure is highly institutionalized: ETF investors and MicroStrategy together control about 10% of the circulating supply, and currently, both are in a floating loss position. This indicates that what used to be a “institutions entering the market” narrative supporting the price may now reverse to become a significant source of selling pressure after being trapped at the top. **Increasing Institutional Unrealized Losses, ETFs Experience Net Outflows** Jim Bianco’s analysis shows that Bitcoin is becoming highly “institutional account-ized,” meaning that for the first time, the market can clearly observe the cost basis and P&L status of major investors. Currently, MicroStrategy and 11 spot Bitcoin ETFs together hold about 10% of circulating Bitcoin supply, with a combined average purchase cost of about $85,360. At current prices, these institutions are facing a floating loss of about $8,000 per Bitcoin, with total unrealized losses reaching roughly $7 billion. Spot ETFs have become the core force affecting the supply and demand structure. Data shows the 11 largest spot Bitcoin ETFs hold 1.29 million Bitcoin, accounting for 6.5% of total circulation with a market value of about $115 billion. However, their average purchase price is as high as $90,200, and the current Bitcoin price is about $13,000 below that level. This high-level buying structure has created a typical pro-cyclical effect. Bianco points out that these ETFs have experienced 10 consecutive trading days of net outflows, with investors choosing redemptions amid drawdowns after buying at highs. This capital structure is amplifying the market’s downward volatility. **MicroStrategy Safety Cushion Narrows; Aggressive Financing Raises Concerns** As a benchmark for corporate Bitcoin holding, MicroStrategy's balance sheet is facing its toughest test in months. The company currently holds 712,647 Bitcoin at an average cost of about $76,037. With Bitcoin trading back to around $78,000, the company’s unrealized gain has narrowed sharply to less than 3%. Despite the thinning cushion, MicroStrategy has shown no signs of backing down. To fund its next round of purchases, the company has adjusted STRC's yield to 11.25%. This return represents a huge premium over typical corporate bonds, reflecting both the company’s acute demand for capital and the inherent volatility risk of its Bitcoin-centric approach. Data shows that since STRC’s launch in November, sales of this product have funded more than 27,000 Bitcoin acquisitions. Analysts believe MicroStrategy remains profitable, but its margin for error has clearly shrunk. Should the price fall further, the company would face an overall floating loss. Maintaining such high-cost dividend payments could strain cash flow, especially if Bitcoin drops below the critical $76,000 cost line, making this risk particularly acute. **Old Narratives Fail, Market in Need of New Momentum** From a macro perspective, the recent plunge has intensified the market's prevailing disappointment. Jim Bianco believes the true problem facing Bitcoin is the lack of new narratives. The previously much-anticipated “Boomer Adoption” story has already been priced in, and may now even be invalidated. The current market structure shows that ETFs and MicroStrategy are not only buying in large quantities and with high concentration, but also now entirely underwater. Bianco notes that unless new sustainable buying narratives emerge, the trend of capital outflow may persist. Under such conditions, what was once seen as a bullish institution-heavy positioning could instead become the biggest source of market pressure. Bitcoin’s problem now isn’t about past buyers, but about where the next batch of buyers will come from at current price levels. Risk Disclaimer The market carries risks and investments should be made cautiously. This article does not constitute personal investment advice, nor does it consider the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions contained herein suit their particular circumstances. Investments made accordingly are at one’s own risk.