MicroStrategy and other companies, including bitcoin miners, have been using convertible notes to raise billions of dollars to add more bitcoin to their balance sheets. Convertible notes are debt securities that can be converted into equity on specific dates or under certain conditions. Despite the high demand for these notes, there is a concern that issuing too much debt could be dangerous for these firms and the crypto market. If bitcoin prices decline, these companies may have to issue more equity or sell their bitcoin holdings at a lower price, potentially leading to dilution or financial difficulties. However, the low interest rates and high volatility of these notes have made them attractive to investors, providing downside protection and the opportunity for profits. While MicroStrategy's strategy has worked so far due to its low average purchase price of bitcoin and staggered bond maturities, other companies with higher purchase prices may be more exposed to risks in the event of a market downturn.



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