With their common stock in free-fall, down about 64% since July, it is harder for Strategy to raise enough capital to meet their debt and dividend payments. Their efforts to pump $STRC to $100 will be even more costly and probably even less successful -- it only reached $100 8 out of 118 days, and has not yet closed a day at $100. I'm sure that their Nasdaq 100 inclusion is helping with funding, but its adding weight to the common stock.

HOWEVER, the elephant in the room is that Strategy owns 649,870 BTC. It is worth about $55 billion today, down from $82 billion last month. Their debt-to-capital ratio is now around 14%, comparable to Microsoft. They could take out loans against their BTC stash, if necessary.

If you are of the belief that BTC is likely to continue dropping and stay at much lower price levels for at least an extended period, then Strategy looks very precarious indeed.

On the other hand, the BTC price has followed global liquidity levels for over a decade. For the past year or two, governments have been tightening the money supply, in an effort to control post-pandemic inflation. This has caused a liquidity glut, with major economies either in a recession, or teetering on one. That seems likely to be coming to an end soon. Japan just announced a ¥21 trillion injection to kick off the liquidity party. So the BTC bear market probably won't last long, as money printers return to their default setting of Brrrrrr.

Time will tell if the scale-invariant behaviour that BTC has established continues to hold. If it does, and the coming liquidity cycle pushes the BTC price up another 10x, what will that say for Strategy's credibility? 🧐