Bitcoin treasury company Strategy (NASDAQ: MSTR) has managed to retain its place in the Nasdaq 100 index, but growing scrutiny suggests its long-term survival may hinge on events unfolding in 2028. New research indicates that while Strategy’s leveraged Bitcoin strategy has benefited from rising prices, it also exposes the company to significant structural risks that could threaten both its balance sheet and the broader Bitcoin market.
According to an analysis by blockchain research firm Tiger Research, 2028 represents a critical inflection point for Strategy due to the concentration of call options tied to its convertible bonds. Until 2023, the company relied mainly on cash reserves and relatively small convertible notes, keeping its Bitcoin holdings around the low six-figure range. This approach shifted dramatically in 2024, when Strategy began aggressively raising capital through preferred equity, at-the-market (ATM) offerings, and large convertible bond issuances. Rising Bitcoin prices reinforced this strategy, enabling even more leveraged purchases and creating a feedback loop tied closely to market performance.
The key concern is that approximately $6.4 billion in redemption pressure from convertible bonds is concentrated in 2028. If bondholders exercise their call options, Strategy would be legally required to repay, leaving the company with limited flexibility. Compounding the issue is Strategy’s lack of operating cash flow. Tiger Research notes that nearly all raised capital has been deployed into Bitcoin rather than revenue-generating assets, leaving no natural source of funds for debt repayment.
If refinancing proves impossible, Strategy could be forced to sell an estimated 71,000 BTC at prices near $90,000. Such a sale would represent a substantial share of daily trading volume, potentially triggering sharp downward pressure across the Bitcoin market. While Strategy’s bankruptcy threshold currently sits near $23,000 per Bitcoin, this level has steadily increased as debt growth has outpaced accumulation.
Despite retaining its Nasdaq 100 status, Strategy faces ongoing skepticism, including an upcoming MSCI review that may challenge whether its Bitcoin-focused model aligns more with an investment fund than a technology company. As Strategy’s stock has fallen sharply in recent months, investors are increasingly questioning whether this highly leveraged Bitcoin treasury model can endure its looming debt obligations.
