In a bold and alarming statement, on-chain analyst OxChain raised the possibility of a catastrophic collapse involving Strategy (formerly MicroStrategy), the Bitcoin proxy firm co-founded by Michael Saylor. According to OxChain, this potential downfall could surpass the infamous collapse of FTX.<\/p>\n
In a recent post <\/a>on X (formerly Twitter), OxChain expressed concerns about Strategy\u2019s aggressive Bitcoin accumulation formula, suggesting that the company\u2019s operations resemble a Ponzi scheme.\u00a0<\/p>\n OxChain pointed out that since 2020, MicroStrategy has transformed from a traditional software company into a significant player in the Bitcoin market, currently holding around 582,000 BTC, valued at nearly $61 billion.\u00a0<\/p>\n However, OxChain claims that this impressive figure is underpinned by leverage, debt, and shareholder dilution, rather than genuine conviction in the cryptocurrency.<\/p>\n The analyst outlined Strategy\u2019s approach as a \u201ccyclical financial loop\u201d: the firm raises capital through shares or bonds<\/a>, purchases Bitcoin, announces these purchases to drive up stock prices, and then raises more funds.\u00a0<\/p>\n The analyst asserts that this cycle has worked as long as Bitcoin\u2019s price continues to rise. However, with plans for a new $1 billion share sale, OxChain believes that Strategy is increasing its risk exposure.\u00a0<\/p>\n OxChain warns that Strategy\u2019s average cost per Bitcoin is approximately $70,000, creating a precarious situation. The analyst adds that if Bitcoin\u2019s price falls significantly below this level, the company\u2019s treasury, currently valued at around $25 billion, could quickly start to suffer losses.\u00a0<\/p>\n According to the analyst, despite Saylor\u2019s public commitment to never sell Bitcoin, the realities of accounting and risk management may force the company to act if market conditions deteriorate.<\/p>\n In the first quarter of 2025, Strategy disclosed $5.9 billion in unrealized Bitcoin losses, revealing the volatility <\/a>of its assets. Under the new accounting standard ASC 350-60, the company is required to report fair value, eliminating the ability to hide behind book value.\u00a0<\/p>\n This transparency has already led to legal repercussions, with shareholders filing a class action lawsuit alleging that Strategy concealed the risks associated with Bitcoin\u2019s volatility while aggressively raising capital.<\/p>\n OxChain further claimed during his social media thread that Strategy\u2019s role as a Bitcoin access point is diminishing, especially as institutional capital flows<\/a> into \u201cmore transparent and regulated options,\u201d such as BlackRock\u2019s iShares Bitcoin Trust (IBIT), which has amassed around $70 billion in assets under management.\u00a0<\/p>\n The analyst stressed that unlike Strategy, which reportedly faces dilution risks and operates with limited safeguards, IBIT offers a \u201cmore stable investment\u201d for those seeking exposure to Bitcoin.<\/p>\nAnalyst Predicts Major Liquidation Risk<\/h2>\n