The Bitcoin (BTC) market is undergoing a period of correction that Michael Saylor, one of the digital currency’s biggest proponents and CEO of Strategy, officially defines as “winter.” With asset prices trading around 46% below their all-time highs, Bitcoiners analyzed the current situation compared to past cycles.
In an interview on February 17th, Saylor argued that the macroeconomic environment and traditional bank support for the Bitcoin ecosystem have led to fundamental changes compared to previous years. This will further accelerate the recovery phase.
As seen in the following graph, the price of Bitcoin fell from US$126,000 to US$67,000 in four months. Thaler was optimistic about the future of the market.
we are in winter. This is Bitcoin’s 5th major correction in the 5 years I’ve been on the market. However, this winter has been much milder than usual. Winter will be shorter than previous winters. This will be followed by a wonderful spring and then summer. So don’t be afraid.
Michael Thaler, CEO of Strategy.
One pillar of Thaler’s confidence is the changing position of traditional financial institutions. For him, the infrastructure surrounding digital currency is It has evolved greatly since 2020.
“The banking sector is now much more strongly supportive of Bitcoin than it was four years ago,” he said in an interview with Fox Business. “We have a digital trust network and a bank trust network forming.”
Furthermore, the experts emphasized the US’ political support, noting the presence of the administration and ministers. Fostering innovation in the digital asset space.
In fact, the current market cycle is quite different from previous ones. This is derived from several things More favorable conditions for digital assets.
CriptoNoticias reported that traditional banks and institutions have decided to open up the space for Bitcoin and cryptocurrencies. This is being done through the integration of products and services targeting these assets, with key examples such as BNY Mellon’s custodial services. and through direct and indirect investments in financial instruments linked to crypto assets such as BTC and exchange-traded funds (ETFs).
In the specific case of Bitcoin, these investment products traded in the US and issued by 12 large financial firms, including BlackRock, Fidelity, and Franklin Templeton, manage $85.52 billion (1.48 million coins) in Bitcoin, according to data from SosoValue, as shown in the chart below.
Thaler assures the strategy is “virtually indestructible”
Meanwhile, Thaler spoke about the financial situation of his company, Strategy. This is considering that the average acquisition cost of their Bitcoin holdings is $76,000, which is more than the digital currency’s current price. it produces Concerns about virtual Bitcoin salesas it will be an event that will have a noticeable impact on the price of BTC and the market as a whole.
In theory, strategic reporting Unrealized loss on paper. This means that the company purchased the coin at a higher price than its current value. In their accounting it looks like the investment value has been lost, but they still have the coins, so it’s a “paper” loss. Essentially, you’re temporarily in the red while you wait for the market to rise.
Notably, accounting standards issued by the Financial Accounting Standards Board (FASB) in December 2024 now allow the company to more transparently reflect the fair market value of its assets on its balance sheet. The regulation would allow companies to record profits and losses in Bitcoin and other cryptocurrencies.
In light of questions about whether this situation was a risk to the company’s stability, Saylor spoke frankly about the structure of the balance sheet. Designed to withstand extreme fluctuations.
“One of the misconceptions that people have is that that number really matters. The most important thing to understand is that most of that Bitcoin was purchased with own funds, not debt,” the businessman explained.
And he added:
If you borrowed money to buy Bitcoin, you could run into problems. However, in 2024 and 2025, we were the largest issuer of capital. I think the company raised $55 billion in capital last year, and of that $55 billion, only $8 billion was in debt. So even though I bought Bitcoin a little above current levels, I sold stocks that were at a significant premium to Bitcoin at the time of purchase. Therefore, the company’s balance sheet is a strength. We are virtually indestructible.
Michael Thaler, CEO of Strategy.
It is important to mention that Strategy stocks typically trade at a higher value than the value of the Bitcoins owned by the company. This allows them to issue more expensive shares and buy Bitcoin at a lower price. This increases the Bitcoin return per share for shareholders.
The expert said that Bitcoin “could fall to any level and it won’t affect us too much,” and that he would continue to buy BTC by converting debt into equity over the next three to six years. “If not weekly, then definitely quarterly in the future. It doesn’t matter if Bitcoin hits rock bottom,” he said.
The above is a scenario that could materialize as long as Strategy’s share price remains above the agreed conversion price. However, if the stock price falls too much, the company may become unstable as it will have to pay its debts in cash. This is a risk that contrasts with the position of “indestructible” entities as proposed by Thaler.
Thaler’s long-term vision spans decades. When asked about the company’s ability to operate without an immediate rebound in asset prices, the executive said: He assured that there will be sufficient capital for the next 50 or 60 years.
“We can withstand short-term market declines. We don’t care about a week, a month, a year. “We’re like a company that owns 3.4 percent of Manhattan and has enough capital to survive until the end of the century,” he exclaimed.
Originally a software company, Strategy transformed under Michael Saylor into a vehicle for large-scale Bitcoin exposure. This change has given us something to talk about.
Critics question the sustainability of its model, calling it a “scam” or a risky scheme, but the company Establishing itself as the leading institutional standard for assets.
The strategy case is essentially a bet on the infrastructure of this currency. Everything follows from Thaler’s premise, but its financial viability depends solely on whether his BTC investment thesis remains solid over the next 10 years.
