MicroStrategy's acquisition of bitcoin through massive debt has led some to believe that CEO Michael Saylor has no risk of liquidation. However, lenders to MicroStrategy do face default risk on their loans, as they expect to be repaid in USD. While some of the debt is convertible, allowing lenders to accept repayment in MSTR shares, no lenders have agreed to be repaid in bitcoin. Although MicroStrategy's bitcoin holdings act as collateral for its debts, the company does face the risk of bitcoin liquidation over time to make interest payments and repay non-converted loans. If the price of bitcoin declines significantly, MicroStrategy could be in serious trouble and may need to seek further financing or go bankrupt.



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