Who falls first in the trillion dollar gamble? Bitcoin or MicroStrategy?

The war between Bitcoin and MicroStrategy is heating up. The company’s entire strategy, and perhaps its existence, is tied to Bitcoin’s unpredictable market. With a trillion dollars on the line, the stakes couldn’t be higher.

MicroStrategy has dumped $25.6 billion into Bitcoin since 2020, scooping up 423,650 BTC at an average price of $60,324 per coin. The company, once known for its software, now holds 2% of all Bitcoin in circulation.

With Bitcoin trading at over $100,000 this week, those holdings are worth $42 billion. Michael Saylor, MicroStrategy’s co-founder and executive chairman, has become Bitcoin’s loudest megaphone. His “21/21 Plan” outlines a strategy to raise $42 billion—half through debt and half through equity—to buy more Bitcoin.

According to Saylor, Bitcoin is the future of corporate finance. He’s even predicting it could hit $13 million per coin by 2045. The confidence is through the roof, but so is the company’s exposure.

Bitcoin breaks records, and MicroStrategy’s stock explodes

Bitcoin crossed the $100,000 mark, shattering expectations and setting a new all-time high. This is a massive milestone for the crypto market, and it’s directly fueling MicroStrategy’s meteoric rise. The company’s stock price has skyrocketed by 540% this year, catapulting its market valuation from $1.1 billion in 2020 to $83 billion.

But this is where the cracks start to show. MicroStrategy’s success hinges entirely on Bitcoin’s price. If Bitcoin stumbles, MicroStrategy stumbles harder.

Analysts warn that if Bitcoin dips below $30,000, the company could be forced to sell parts of its Bitcoin holdings to cover debts. This could trigger a domino effect, sending Bitcoin’s price even lower and deepening MicroStrategy’s troubles.

The company is also dealing with $8 billion in convertible notes due over the next few years. These notes are essentially IOUs, and paying them off depends on Bitcoin maintaining its high value. If the market cools, the company could face a financial nightmare.

Saylor pushes Bitcoin on Microsoft, shareholders say no

Saylor is trying to bring other corporations into the fold. At Microsoft’s shareholder meeting in October 2024, he pitched the idea of diversifying the tech giant’s balance sheet with Bitcoin. He even shared a chart showing Bitcoin’s 62% annual returns from 2020 to 2024, far outpacing Microsoft’s 18% and the S&P 500’s 14%.

“Microsoft can’t afford to miss the next technology wave, and Bitcoin is that wave,” Saylor said. His message was clear: convert cash, dividends, and debt into Bitcoin, and shareholders will reap the rewards.

But Microsoft wasn’t buying it. Proxy advisors Glass Lewis and Institutional Shareholder Services recommended rejecting the proposal, and shareholders followed suit. Microsoft CEO Satya Nadella wasn’t swayed either.

Despite this, Saylor didn’t back down. He even tweeted Nadella, saying, “If you want to make the next trillion dollars for Microsoft shareholders, call me.”

The company, which already accepts crypto payments, said it continues to monitor trends in the space. But for now, the company isn’t making any big moves. While Microsoft’s stock is up 19% this year, it’s nothing compared to MicroStrategy’s explosive growth.

If Bitcoin can deliver a consistent 43.2% quarterly yield, MicroStrategy’s math turns insane. By the end of 2026, the company could multiply its Bitcoin holdings per share by 17x. Let that sink in for a moment. A 2-3x net asset value (NAV) sounds laughably small compared to what Saylor’s playbook is targeting.