The "Hidden Crisis" of the 60 Billion Dollar Bitcoin Empire: SEC Documents Reveal Seven Major Risk Points

CryptoQuant stated in a post on X that as of June 30, 2025, the business intelligence giant Strategy (, formerly known as MicroStrategy), holds an astonishing 597,000 Bitcoins(BTC). The purchase cost of these Bitcoins was $42.4 billion, and their current market value has reached as high as $64.4 billion, resulting in significant unrealized gains.

(Source: X)

However, in its latest filing with the U.S. Securities and Exchange Commission ( SEC ) (the 8-K form submitted in July 2025), the company candidly disclosed the significant risks associated with holding such a large amount of Bitcoin. These risks are by no means conjecture, but rather stem from the company's own official warning. Let’s break it down one by one:

Risk One: Unrealized Gains = Real Tax Bill ( Impact of Accounting Rule Change )

Due to the new accounting standard ( ASU 2023-08 ) coming into effect, Strategy now needs to report its holdings of Bitcoin at fair value (market price) — even if they haven't sold a single coin.

Key Impact Point: Starting in 2026, this massive unrealized gains may trigger the 15% minimum alternative tax (Corporate Alternative Minimum Tax, CAMT).

📌 Core Risk: The company may need to pay actual cash taxes on unrealized gains from Bitcoin.

Risk 2: Tax pressure may force BTC sell-off ( liquidity crisis warning )

The strategy is clearly stated in the document:

“We may need to liquidate some Bitcoin holdings, or issue additional debt or equity securities to raise enough cash to meet our tax obligations.”

Plain language interpretation: If a massive tax bill really comes, selling Bitcoin for cash may be the only way out.

Risk Three: Insufficient Cash Flow in Core Business ( The ability to generate funds is concerning )

The company speaks frankly:

“We do not expect the cash generated from the software business to be sufficient to cover such (tax and other) expenses.”

This means that the cash flow generated by its core software business, which it was founded on, is not enough to cover debt interest nor to support preferred stock dividend payments. The result is: 🔸 Highly dependent on external financing ( issuing bonds or increasing stock ) 🔸 or may be forced to sell Bitcoin assets

Risk Four: Debt + Dividends = Over $350 million in annual fixed expenses ( fixed cash burden )

As of June 2025:

• 8.2 billion USD convertible debt
• 3.4 billion preferred shares ( include STRK, STRF, STRD series )

Thus produced: → $36.5 million debt interest per year → $315.9 million preferred stock dividends

Total: Annual fixed cash expenditures exceed $350 million! Regardless of how Bitcoin prices fluctuate, this huge fixed expense remains unchanged.

Preferred Stock Dividend Explanation (STRK/STRF/STRD): 💰 STRK ( Dividend Yield 8% ) – Can be paid in cash or additional shares (but there are proportion limits) 💰 STRF ( Dividend Yield 10% ) – Must be paid in cash, failure to pay will result in compound interest 💰 STRD ( Dividend Yield 10% ) – Non-cumulative, but still requires cash payment

Severe consequences of failing to pay on time: It may lead to fines, equity dilution (to the detriment of original shareholders), and even grant preferred shareholders a seat on the board, threatening control of the company.

Risk Five: Financing Blocked? BTC Sale Becomes the Last Option

The company admits:

“If we are unable to obtain equity or debt financing... we may be forced to sell Bitcoin.”

Logical Chain: Financing failure → Forced to sell BTC for cash ↓ Potential market impact + realize book losses

Historical precedent: Despite the community slogan (meme) of "never selling Bitcoin"... 📉 Strategy sold Bitcoin in the fourth quarter of 2022 (as previously disclosed in SEC filings).

Key Reminder: When liquidity is tight, all options (including selling BTC) are on the table.

Risk Six: Bitcoin custody security is not foolproof ( staking risk exposure )

Even if it is custodied by a professional institution, it is not absolutely safe:

“If the Bitcoin we hold in custody... is considered part of the custodian's bankruptcy estate... we may be classified as unsecured general creditors...”

Interpretation: If the custodian (such as an exchange or custodial bank) declares bankruptcy, the Strategy may lose its priority claim on the Bitcoin it has entrusted to them, and can only queue as an ordinary creditor waiting for repayment, which poses a risk of asset loss.

Risk Seven: Extremely High Sensitivity to Macroeconomic and Market Volatility ( High Leverage Double-Edged Sword )

The company acknowledges its extreme sensitivity to the following factors:

• Bitcoin price fluctuates dramatically
• Interest Rate Changes ( affect financing costs and debt value )
• Regulatory Policy Shift
• Market Liquidity Conditions

This deeply binds and highly leverages the Strategy in terms of asset value and company reputation to Bitcoin. Any fluctuation in Bitcoin could have a disproportionately amplified effect on the company.

Important Statement: This article is not FUD dissemination

📢 Disclaimer: This analysis is not intended to spread FUD about Strategy or Bitcoin. The content is summarized and interpreted entirely based on the information disclosed in writing by Strategy in its official SEC documents (Form 8-K filed on July 7, 2025). Make sure to do your own in-depth research before making investment decisions (DYOR).

Final Thoughts:

The Bitcoin strategy of Strategy (MSTR) is undoubtedly bold and has been very successful so far. However, its own disclosure documents clearly indicate that: 📌 This is a typical high-risk, high-return strategy. 📉 If any of the following situations occur, this strategy may face severe challenges or even collapse:

• Bitcoin price plummets
• Credit market freeze (unable to finance)
• Massive tax bill landing

Please stay tuned and assess the risks carefully.