What Happens If MicroStrategy Dumps All Its Bitcoin?

[Swordsoffreedom]

Microstrategy Bitcoin holdings amount to only 2% of the total Bitcoin in cyculation som from sure if the went all out to dump their Bitcoin holdings, it won't amount to anything significant to the entire Bitcoin market, it dump won't even be noticed, and even it there will be any impact on the market from Microstrategy possible dump it will be a temporary drop in price of BTC.

Bitcoin has a market cap of nearly $2 trillion but daily liquidity is only around $30-50 billion. That is why when German government sold 50kBTC or Mtgox distributed bitcoin to the market also caused a big panic in the market. Meanwhile, the amount of bitcoin that Strategy holds is 555,450BTC, worth nearly $40 billion, which is even larger than the daily liquidity of bitcoin. That means if they sell out at the same time, a market crash is inevitable. Don't underestimate them.

That is something no one wants or expects to happen because the cryptocurrency market is still very small and fragile, it is not big and solid like the stock market.

[death69]

If MicroStrategy dumped everything? It's not a black swan. That is a grey rhino, highly apparent, highly likely, and repeatedly ignored. The real black swan is you thinking they would sell at all.

Saylor did not only "buy Bitcoin". He anchored his public brand, balance sheet, and business name to it. If they sell, it won’t be because of price, it’ll be because the entire Bitcoin thesis itself collapses. And, if that occur, MicroStrategy will be the least of your concerns. Your pension, your fiat, your nation-state credit rating? Everything in the crossfire.

Institutions are not wiser than individuals. They are simply larger lemmings in better suits. They follow stories instead of numbers. Their pursuit is flows, not fundamentals. They can panic-sell. But if that happens, what’s the bigger collapse? The price of Bitcoin… or the illusion of institutional competence?

The fear is not that Saylor leaves the game. The fear is that you’re still relying on centralized whales to set the tone in a decentralized ecosystem. If Bitcoin dies because one man sells, it never lived to begin with.

[AVE5]

What if MicroStrategy decided to sell all of its Bitcoin?

Could that be a black swan event?

The very thought is unsettling.

What if institutional investors, like retail traders in the past, are hit by BTC FUD and choose to panic-sell all their holdings?

Do you see this as a realistic possibility in the future, or am I overthinking it?

By the option you must be overthinking because it's hard to see microstrategy stepping back from their holding on bitcoin. Not because they're the champion whaling institution but they're not holding their in vein as they're also gaining profits returns at the increase of the treasure market.
Moreover microstrategy is an economic institution and are obliged of investing on any foreseen opportunities that'd bring increase to their bankrolls.

[348Judah]

What if MicroStrategy decided to sell all of its Bitcoin?

Its their possesion and they can make decision on selling at any time as they wish, but from the way am seeing it, i dont think they are going to sell at once or any time sooner, so we should not place our mind on that.

Do you see this as a realistic possibility in the future, or am I overthinking it?

Anything can happen at any time, we dont have to think in one direction over this, its their investment and they can take any necessary step over their asset, it may have a short time influence over the market, because they are dumping and know that others are ready to buy it.

[Accardo]

Then Saylor's clients would feel disappointed because they lent the company money to purchase Bitcoin, and these investors depends on the success of Microstrategy which is tied to the growth of Bitcoin.

[Dark.Look]

If they really do sell the bitcoins they got (I don't think if they will do that in real life) there are many people who will buy dip, and this is how we can see more people take advantage of holding bitcoins they bought in dip thanks to MicroStrategy. There is also the chance for the bitcoin price to see lower prices but thin can be just temprpray because even during the time when a company like MicroStrategy didn't buy bitcoin, we saw the bitcoin on bitcoin was always reaching new ATH.
Generally I think think can give us a good chance to buy.

[coolcoinz]

Bitcoin has a market cap of nearly $2 trillion but daily liquidity is only around $30-50 billion. That is why when German government sold 50kBTC or Mtgox distributed bitcoin to the market also caused a big panic in the market. Meanwhile, the amount of bitcoin that Strategy holds is 555,450BTC, worth nearly $40 billion, which is even larger than the daily liquidity of bitcoin. That means if they sell out at the same time, a market crash is inevitable. Don't underestimate them.

That is something no one wants or expects to happen because the cryptocurrency market is still very small and fragile, it is not big and solid like the stock market.

Fear mongering once again.

Firstly, Strategy did not buy all this bitcoin using spot exchanges. Why would they buy OTC and then transfer to exchanges to crash the market? This would make no sense.
Secondly, selling all on one day would fill all the buy orders, practically taking a large exchange like Coinbase or Binance to near 0. If you know how price tickers work, they log the last transaction and show that as current price, so if there are no buy orders at $10k it takes the order at 9k, then 8k, then 7k and so on. The market depth of exchanges is not enough to sustain a 100kBTC dump, not to mention 500k, so they'd start filling sub $10k orders, which is suicidal for any seller at this point. They'd have to purposely throw away 80% of their money. No company is going to do that.

You're wasting your time thinking about it because it's never going to happen. If they sell they will do it OTC.

[Lida93]

If MicroStrategy sells all his bitcoin, the price of bitcoin will only be affected temporarily and after a while, the price will go back to normal because other investors will buy them. Just like in the last quarter of last year that Germany government sold all the bitcoin seized from movie2k, the price was down for a while but we were able to see a new ATH.

Microstrategy is quite different from the Germany government.
Microstrategy represent a movement and has been a supporter of Bitcoin
The CEO has stated he plans on not selling his Bitcoin
Now if such group chooses to sell?
The gap wouldn't be on just the quantity that's been offloaded in the market
But fear of what such action could represent. .

Yea, CEO of Strategy public made it known he doesn't have the intention of selling his bitcoin and if possible he's going to take it to his grave but let not forget that certain circumstances beyond his control can trigger the necessity to sell even if it's a portion of their total portfolio.

I think whether or not Strategy decides to dump a lump or total of its BTC holdings it would send a strong wave of dip but it  wouldn't have a long time effect on the market afterall, there are other whales and he's not the only existing even though he's with highest holdings.

 Another thing, with the level of institutional interest in bitcoin Strategy selling off all it's bitcoin would be giving another institutional investors a leading role while they fall behind and bitcoin still continue growing at the end

[Franctoshi]

Microstrategy does not control the price of Bitcoin despite the company holding some reasonable amount of Bitcoin in their portfolio, in every seller there's a buyer so someone else will definitely buy it up, I don't think Microstrategy Bitcoin dump will be greater than that of China's dump during the 2020/2021 bull/ bear market, but looking at Microstrategy aggressive buying of Bitcoin which has helped his company's share skyrocket, I doubt if he's even thinking of selling their Bitcoin holding anytime soon.

[red4slash]

The impact is only small although for the normal size of microstrategy ownership it is very much but there will not be any impact that can affect for the long term because this situation will remain the same as it happened for several years ago such as when Elon released their bitcon ownership from Tesla or several countries that made uncomfortable regulations for bitcoin.

The decline will indeed occur but it is only for the short term not for the long term because in the end bitcoin will still continue to grow with the presence or absence of whales including for microstrategy.
Precisely what will get a long-term loss in this case is the microstrategy that does release ownership even though in the short term they will benefit but not in the long term so that until now I still doubt if in the end Microstrategy releases their ownership of bitcoin for now.

[Samlucky O]

What if MicroStrategy decided to sell all of its Bitcoin?

Could that be a black swan event?

I have never read the story of the black swan Event though   but I am responding on the statement of what will happen if microstrategy decided to sell all the Bitcoin in their possession?
Well that will be a big shake on the cryto market. Surely I know microstrategy has no plan to sell the Bitcoin in their possession anytime soon, but if  that be the case and plan changes then it will really shake the market like I said earlier. That will cause a sudden dip in the market and it will creat panic amongst investors and Bitcoin will keep diping to an extent where some other institutional organization will decide to take the advantage of the dip in price and buy more and the market will be bullish again and more people will follow suit with the trend and Bitcoin will come back again to it's price or even more higher ppl rice depending on the force that triggered the massive adoption like that of Donald Trump.

What if institutional investors, like retail traders in the past, are hit by BTC FUD and choose to panic-sell all their holdings?

Definitely there will be FUD leading to massive sell and it will also leed to massive buy and it will rise again like I said in the previous post above.

Do you see this as a realistic possibility in the future, or am I overthinking it?

Everything is possible in the world of crypto, and that is why it is termed as speculation anyone can come up with an idea and it comes to pass. So it is likely to happen in the future but I don't think microstrategy will sell all the Bitcoin in there possession at once. It will be gradually and not any moment from now.

[Wexnident]

~

As others have said, sharp price drop but temporary. Now depending on the scale (and state of market), it could either be a very long recovery or a very short one. Bottom would probably be pretty short lived since a lot would say it's a buy opportunity though. Idrk how long it'd actually take to go back to its initial price.

Well if MS changes hands then maybe? Right now though they're pretty commited with Bitcoin though, so I don't really see it happening.

[SquirrelJulietGarden]

As others have said, sharp price drop but temporary. Now depending on the scale (and state of market), it could either be a very long recovery or a very short one. Bottom would probably be pretty short lived since a lot would say it's a buy opportunity though. Idrk how long it'd actually take to go back to its initial price.

Price falls in a bull market are different in a bear market and in bull market, price after correction will not only recover but also make its new all time high. In contrast, in a bear market, after a fall, price will bounce and recover for a while but it will never make a new all time high but will fall again then make a new lower low until it reaches to bottom. Unfortunately bottom in a bear market takes a long time to be hit.

Well if MS changes hands then maybe? Right now though they're pretty commited with Bitcoin though, so I don't really see it happening.

If they sell proactively, they will do it gradually because they know of price effects and market panic reactions from their massive dump. Except only if they get liquidation and has forced sells, but from its financial and investment model, I don't see their portfolio has risk of liquidation. I could be wrong and I am open minded to change it if you can point any inaccuracy here.

Firstly, Strategy did not buy all this bitcoin using spot exchanges. Why would they buy OTC and then transfer to exchanges to crash the market? This would make no sense.
Secondly, selling all on one day would fill all the buy orders, practically taking a large exchange like Coinbase or Binance to near 0.

You're wasting your time thinking about it because it's never going to happen. If they sell they will do it OTC.

I totally agree with you that if they sell, they will mainly do it with OTC markets and will not do it in one sell or one day.

[BITCOIN4X]

~Snip

I totally agree with you that if they sell, they will mainly do it with OTC markets and will not do it in one sell or one day.

They don't seem to want to sell like the government sells some confiscated bitcoins, I don't think MicroStrategy will do that. They know how to do it and they don't appear to be planning on ruining everything in one big transaction, Saylor is a believer in bitcoin not just an investment.

But however, we cannot completely ignore several things, including the risk of market collapse due to massive selling carried out by several other institutions. They could be making plans to crash the market while preparing to buy more, this is a form of manipulation that has been thought about and perhaps often carried out by bitcoin whales.

[coupable]

What if MicroStrategy decided to sell all of its Bitcoin?

Could that be a black swan event?

MicroStrategy selling all of its Bitcoin could be a major shock to the market and is indeed a crazy scenario. However, it only becomes a black swan if it triggers a series of unexpected events that radically alter the markets. This would be in the form of a sudden sell-off of the entire amount, flooding the market completely. This would then cause the price to collapse to record lows, causing investors to lose confidence in major companies, especially asset managers, and continue pumping more Bitcoin out of fear. This would then lead to a domino effect.
The market will likely recover over time, but not without violent short-term fluctuations, as the market is able to absorb the massive amounts of Bitcoin gradually. One of the most significant negative consequences is the intervention of authorities to issue more laws and regulations that increase restrictions on the sector as a whole.

[BenCodie]

It would be a black swan event. How catastrophic it would be depends on wider market conditions and a key question:
- Was there a reason for their dump, or their own decision?

If there was a problem with BTC that caused them to sell, the market could flood with other corporate holders following suit, not to mention others (depending how significant the issue is). Though if there wasn't a real reason and it was their own decision, other corporate holders might scoop up the coins, and it might be a temporary (but sizeable) dip.

MSTR's reputation would be destroyed instantly either way, given Saylor's ongoing statements that the company will never dump.

[BALIK]

Then Saylor's clients would feel disappointed because they lent the company money to purchase Bitcoin, and these investors depends on the success of Microstrategy which is tied to the growth of Bitcoin.

Why should they be disappointed when Strategy takes profits and shares them? Microstrategy customers and investors will only be disappointed if they buy bitcoin and never sell because the goal of investing is profit, not holding until death.

Microstrategy's growth is tied to the growth of bitcoin as it is the largest reserve asset in the company's treasury, accounting for nearly 50%. But besides that, Strategy's existence does not only depend on bitcoin investment, they also have their own business segment. They are still a company that provides services and products in the field of data analytics for businesses.

[headingnorth]

MSTR makes plenty of money by simply issuing or selling shares of its stock,
so there is never any need for them to sell the underlying bitcoin.

But if you still find yourself in great fear of such an unlikely scenario occurring, I would suggest
not investing in something as volatile as bitcoin and especially don't invest in MSTR
which is even more volatile. You will not be able to sleep at night.

You will just end up panic selling at a loss whenever you see the price going down.

[Die_empty]

Then Saylor's clients would feel disappointed because they lent the company money to purchase Bitcoin, and these investors depends on the success of Microstrategy which is tied to the growth of Bitcoin.

If the company's board of directors might decide that selling Bitcoin will serve the best interest of the firm at a particular time. But with the level of confidence Saylor had in Bitcoin, I doubt if they will sell without a serious reason.

 

Microstrategy does not control the price of Bitcoin despite the company holding some reasonable amount of Bitcoin in their portfolio, in every seller there's a buyer so someone else will definitely buy it up, I don't think Microstrategy Bitcoin dump will be greater than that of China's dump during the 2020/2021 bull/ bear market, but looking at Microstrategy aggressive buying of Bitcoin which has helped his company's share skyrocket, I doubt if he's even thinking of selling their Bitcoin holding anytime soon.

Microstrategy might not control the Bitcoin market but with the amount of the coin they are holding they can manipulate the price for a short time. The news of the company dumping might spur people to selloff which would make the price drop. Just like other times, the price of Bitcoin will recover because there are always willing buyers.

[john_egbert]

MSTR makes plenty of money by simply issuing or selling shares of its stock,
so there is never any need for them to sell the underlying bitcoin.

But if you still find yourself in great fear of such an unlikely scenario occurring, I would suggest
not investing in something as volatile as bitcoin and especially don't invest in MSTR
which is even more volatile. You will not be able to sleep at night.

You will just end up panic selling at a loss whenever you see the price going down.

Agreed. Nerves are the killer of any investment, and the more you think about the possibilities, the more likely you are likely to act irrationally.