- MicroStrategy has taken on huge risks to buy Bitcoin.
- Buying Bitcoin directly is much safer than buying a company that holds it with debt.
- Don’t confuse a Bitcoin holding company with Bitcoin itself.
Michael Saylor has become one of the most well-known faces in the Bitcoin world—but his company’s bold approach is now raising serious concerns.
MicroStrategy Reports $6 Billion in Unrealized Losses in Q1
Michael Saylor’s company, MicroStrategy, has just revealed a massive $5.91 billion in unrealised losses for the first quarter of 2025. Even though Bitcoin is currently trading above $83,000, this isn’t as good as it sounds. That’s because MicroStrategy bought most of its Bitcoin at an average price of $67,458 using borrowed money—not profits.
This isn’t a simple case of holding Bitcoin and waiting for it to rise. It’s a complex and risky financial setup that could create big problems down the line—not just for MicroStrategy but potentially for the entire crypto market.
How Did Saylor Buy the Bitcoin?
Saylor didn’t use the company’s profits to buy Bitcoin. Instead, he raised money by selling debt and shares. One way he did this was by issuing something called convertible bonds. These are deals made mostly with hedge funds, who don’t actually care about Bitcoin. They care about making money from market movements.
To protect their investment, these hedge funds often bet against MicroStrategy’s stock. This puts even more pressure on the company’s share price. And when the bonds come due, the company may have to either issue more stock or sell its Bitcoin to pay up—because there’s not enough cash lying around.
Promises of High Yields with No Real Income
As if taking on debt wasn’t risky enough, Saylor added another layer: offering investors preferred shares with 8–10% interest. But here’s the problem—Bitcoin doesn’t generate income. And MicroStrategy itself isn’t making enough money to cover those payouts.
So where does the yield come from? New investors. That means old investors are paid with money from new ones. If the inflow of new money slows down, there will be a big problem. The company may be forced to sell Bitcoin to meet its promises, which could create panic and push prices down.
Bitcoin and MicroStrategy Are Not the Same Thing
It’s important to understand that buying MicroStrategy stock is not the same as buying Bitcoin. Bitcoin is decentralised, limited in supply, and doesn’t rely on any one company or person. MicroStrategy, on the other hand, is a business run on debt, stocks, and market expectations.
Yes, they hold a lot of Bitcoin—but how they hold it and what they do to fund it make their situation far riskier. So if you think buying MSTR stock gives you safe Bitcoin exposure, you might want to rethink that. You’re investing in a company with a very complex financial setup—not directly in Bitcoin itself.
Final Thoughts
For everyday investors, the lesson is clear: if you want to own Bitcoin, it’s safest to buy it directly. Buying shares of MicroStrategy isn’t the same thing—it’s a bet on a company that’s deeply tied to Wall Street’s ups and downs.
