As MicroStrategy (MSTR) has experienced a significant drop of over 55%, speculation has increased regarding the possibility of a “forced liquidation.” With the company owning approximately 499,096 Bitcoins worth $43.7 billion, many are questioning whether further declines in the price of Bitcoin could force MicroStrategy to sell its holdings. MicroStrategy has been accumulating Bitcoin for years, with an average purchase cost of around $66,350 per BTC. This isn’t the first time concerns about liquidation have surfaced; similar discussions arose during the 2022 bear market, when Bitcoin fell from around $70,000 to around $15,000. But the key question remains: Is it different this time? The foundation of MicroStrategy’s Bitcoin strategy is its ability to raise capital. In a scenario where liabilities significantly exceed assets, this ability could be compromised. But that doesn’t necessarily mean “forced liquidation.” MicroStrategy's approach includes: Borrowing through 0% convertible notes. Using capital to buy Bitcoin and increase exposure. Selling shares at a premium to raise additional capital. Repeating the cycle to expand assets even further. MicroStrategy currently has approximately $8.2 billion in total debt, backed by $43.4 billion worth of Bitcoin, reflecting a leverage ratio of approximately 19%. Importantly, most of this debt is in the form of convertible notes with conversion prices below the current share price and do not mature until 2028. Related News: Investment Strategist Explained Why Bitcoin Price Declined, Shared the Event He Said “If This Happens, It Will Fall Even Lower” A forced liquidation would likely require a “fundamental change” within the company. Under existing credit agreements, early repayment of convertible notes can be triggered under certain conditions. However, for this to happen, typically one of the following conditions would need to be met: Shareholders vote to dissolve the company. Corporate bankruptcy. MicroStrategy co-founder and Chairman Michael Saylor holds 46.8% of the voting power, making a shareholder-initiated liquidation unlikely. For a serious liquidity problem to occur, Bitcoin would need to experience a sustained price decline of over 50% from current levels. Saylor has repeatedly dismissed the idea of forced liquidation, even claiming that the company would “buy all of Bitcoin” if Bitcoin fell to $1. However, the role of convertible stockholders in such a scenario cannot be ignored. A sustained decline in both Bitcoin and MSTR stock prices could hinder MicroStrategy’s ability to raise capital, which is crucial to its long-term strategy. Investors are witnessing the first bearish market for MicroStrategy since its Bitcoin-focused strategy began gaining traction in 2024. The question is: will investors continue to “buy the dip”? Michael Saylor's stance is clear: “Bitcoin is on sale.” Time will tell whether the market agrees. *This is not investment advice. Continue Reading: Could MicroStrategy Be Liquidated If Bitcoin Falls Further? Which Level in BTC is Critical for Liquidation?
Recent market dynamics indicate that Solana (SOL) may struggle to recover amid falling on-chain activity and diminishing trading volumes. In the last week, a dramatic 30% reduction in decentralized exchange
A Solana price recovery could lag Bitcoin and altcoins. Cointelegraph explains why
Story Protocol, a Layer 1 blockchain focused on intellectual property (IP), is unbothered by the recent carnage in crypto markets, with its $IP token leading all major altcoins since its launch on Feb. 13. The $IP token is up 34% in the last 24 hours and 220% in the last week, while the rest of the altcoin market, represented by OTHERS , is down 10% over the week and 6% in the last 24 hours. To continue reading this as well as other DeFi and Web3 news, visit us at thedefiant.io
Solana’s recent price decline has captured the attention of investors, dropping to a four-month-low amidst escalating market concerns. The token’s downfall can be attributed to a significant loss of trading
Confidential protocols put in place to deal with news of regulatory failings by one of the top-five crypto exchanges, OKX, suggest that the company likely has been expecting a settlement with U.S. authorities for some time. This happened on Monday when OKX announced a $500 million-plus settlement with the U.S. Department of Justice after failing to secure a money transmitter license and allegedly facilitating $5 billion in "suspicious transactions and criminal proceeds." OKX’s meticulous planning makes for some fascinating reading. The secret crisis management document seen by CoinDesk refers to a messaging “SWAT Team” that can be mobilized to implement various ways the firm’s top executives can communicate a settlement via social media and when speaking to reporters. Well in advance of Monday’s large fine and forfeiture, OKX had produced specific guidance with regards to settling with the DOJ, as well as the U.S. Treasury Department's Office of Foreign Assets Control (OFAC, or sanctions watchdog), for example. A favored approach is to point out that the entire crypto industry has been broadly under intense scrutiny and that OKX is cooperating fully with regulators, the document said. This was echoed in Monday’s press release which said OKX “appreciates” the DOJ’s “collaboration.” Since the administration of President Donald Trump took over last month, the main focus for regulatory agencies in the crypto arena has been to reverse their previously aggressive enforcement stance, with the SEC dropping ongoing litigation and closing investigations . But not so in the case of OKX, which, like Kucoin with its recent $300 million penalty and Binance back in 2023, has been forced into costly settlements. The guidance refers to what is expected from OKX founder Star Xu, President Hong Fang and other executives when it comes to “their social media actions in two scenarios: 1) Leak before OFAC settlement, 2) upon OFAC settlement.” Also, on the issue of OFAC, if executives are asked if OKX has served sanctioned markets, one suggestion is to say: “Customers from sanctioned markets slipped through when we had immature compliance controls and systems [...] It is a very small and insignificant part of the Okcoin or OKX customer base.” Indeed, Monday's press release from OKX acknowledged that U.S. customers were able to trade on the global exchange. "The total number of U.S. customers involved – which are no longer on the platform – amounted to a small percentage of the Company’s worldwide customer population," the release said. Brand awareness Another priority for OKX is how the firm choreographs its big-ticket sponsorship arrangements with the likes of Manchester City football club, F1 team McLaren and the Tribeca Film Festival. The firm estimates that around $100 million per annum has been spent on these partnerships over the past three years. The action plan for brand partners involves the OKX marketing chief giving each partner a phone call “at the last hour before the news breaks.” The recommended strategy here is to say OKX has prepared for a regulatory review, given the heightened scrutiny on crypto firms. If asked why the exchange did not share information about this before, the document states that these are pending inquiries and non-public matters. There is also a bullet point suggesting the CMO and OKX’s head of legal “review clauses in our brand partner contracts again.” Don’t mention OKB Another detail that gets attention in the OKX planning document is the exchange’s native cryptocurrency, OKB. An obvious concern in the aftermath of FTX is any suggestion that OKB has been used as collateral or to finance any operations of OKX, as was the case with FTX’s FTT token . Of course, the OKB exchange token hasn't been subject to anything like the iniquities of FTX’s exchange token. However, it was involved in a sudden flash crash in January 2024, after which OKX quickly offered to compensate users who had lost out. The token, which has a relatively thin trading volume and liquidity, saw 10 dormant wallets become active and begin trading just before the crash, according to Marina Khaustova, COO Crystal Intelligence, a blockchain analytics firm. Not long after the OKB crash, OKX executives Tim Byun, the former CEO of OKcoin and head of global government relations, and Head of Product Wei Lan were let go by OKX . A source familiar with the situation said Byun was "sacrificed" following the OKB crash. Unsurprisingly, the OKX comms protocol emphasizes that execs should “refrain from mentioning OKB and reference this only if asked.” Media management Another part of the puzzle is how the exchange should deal with media inquiries. Should OKX receive emails or a phone call from a journalist looking for comment about ongoing investigations, the SWAT Team and PR team should go into action to “buy time by offering up leadership schedules” Meanwhile, the plan is “to contact key friendly publications for a parallel story to seed in a complimentary narrative to the originating story,” the document states. “1. Push for delay 2. Confirm friendly publications 3. Asynchronously queue up internal / external comms, so we hit send as the story comes out,” it said. OKX did not provide a comment by press time
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Solana’s native token hit a four-month-low price of $132 on Tuesday, down from its record high of $293 set in January.
XRP’s recent price movements have followed a pattern that crypto analyst Javon Marks believes signals the potential for a strong continuation rally. Sharing his analysis on the social media platform X, Marks pointed to a “hidden bullish divergence” on XRP’s daily candlestick chart. Despite the ongoing price crash, the presence of this bullish divergence opens up new bullish targets for the XRP price. XRP’s Price Crash Worsens, But Hidden Bullish Divergence Suggests Next Move XRP’s price action has faced consistent downward pressure over the past week, with the decline intensifying in the past 24 hours. At the time of writing, XRP has dropped by approximately 13% in the past 24 hours and is on the verge of retesting a crucial support level at $2. Related Reading: XRP Price Breaks Out Of Symmetrical Triangle Pattern, Why The Target Is $8 However, an interesting analysis shows that this decline is part of a hidden bull divergence pattern, where both the price and the RSI indicators are creating a series of highs and lows on the 1-day candlestick timeframe. This interesting pattern is characterized by higher lows and higher highs on the XRP price chart, while there’s a series of lower lows and lower highs on the RSI indicator. This divergent formation between the cryptocurrency’s price and the RSI is known to be bullish. Particularly, it suggests the selling pressure shown by the RSI could be slowing down. Javon Marks emphasized that XRP is preparing for a “massive continuation wave up” and that the necessary technical confirmations for such a move are already in place. This assertion builds upon his earlier February 18 analysis, where he described the hidden bullish divergence as forming in a “textbook fashion. Crash To Reverse Soon? Price Targets To Watch According to Javon Mark’s projection, an upside move would see the XRP price eventually creating a higher high, as expected from the bullish divergence pattern. In terms of a specific price target, Mark’s projection shows that the next peak could reach at least $3.80. If realized, this would push XRP beyond its current all-time high of $3.40. Related Reading: XRP Price Rallies To ATH At $3.4, Here’s What’s Driving It And Why The Pump Will Continue However, this outlook hinges on the XRP price holding above the bullish divergence support at $2. Any sustained breakdown below this threshold could challenge the strength of the projected rally and alter the bullish outlook. Adding to this perspective, Marks also noted the similarity between XRP’s consolidation in the past few weeks since it reached $3.36 and that of a consolidation after a strong rally in the first half of 2017 after a strong rally. Although the current consolidation phase has lasted longer than the one observed back then, both formations share key structural similarities. The 2017 consolidation ultimately led to a continuation rally that pushed the XRP price to new highs. If history repeats itself, the present consolidation could also be a precursor to another significant leg up. At the time of writing, XRP is trading at $2.15, down by 13.2% and 15.9% in the past 24 hours and seven days, respectively, and is now in danger of losing the $2.0 support soon. Featured image from Adobe Stock, chart from Tradingview.com
This is a segment from the Forward Guidance newsletter. To read full editions, subscribe . We’ve rounded up the myriad of crypto ETF plans issuers are dreaming up, and launching. The proposals continue to move beyond ones focused on solana, XRP and litecoin . An update from yesterday: A 19b-4 filing from Nasdaq signals Grayscale Investments’ intent to offer a Polkadot ETF. 21Shares put out a similar proposal a few weeks back. Polkadot (DOT) has a market cap of nearly $7 billion, ranking it 26th among crypto assets. The filing is not a proposal for Grayscale to convert one of its existing trusts to an ETF wrapper, like it had done with its bitcoin and ether products. That’s because it does not yet have a trust investing in DOT. I previously wrote about how Grayscale historically first goes with private placement launches for accredited investors before obtaining public quotations for unrestricted shares and making the products SEC-reporting companies. The conversion to an ETF is the final step. Grayscale skipped the initial steps upon filing for a Cardano ETF . Speaking of that product, the SEC acknowledged it in a Monday filing , noting the agency would solicit comments on the proposal. The thought is that Grayscale (despite not returning requests for comment) must feel it can take these shortcuts given the evolving regulatory environment . This comes after Nasdaq late last week filed to list shares of Canary Capital’s proposed HBAR ETF, which hold Hedera’s native cryptocurrency. This 19b-4 filing comes a few months after the company submitted an S-1 for the product in November. So, the momentum around altcoin ETF filings has not changed from when we last checked in. The next one we’ll see is anyone’s guess. Get the news in your inbox. Explore Blockworks newsletters: Blockworks Daily : The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam. Empire : Start your day with top crypto insights from David Canellis and Katherine Ross. Forward Guidance : Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. 0xResearch : Get alpha directly in your inbox — market highlights, charts, degen trade ideas, governance updates, and more. Lightspeed : All things Solana, in your inbox, every day from Jack Kubinec and Jeff Albus. The Drop : The newsletter for crypto collectors and traders, covering games, tokens, apps, memes and more.