Strategy’s aggressive Bitcoin (BTC) strategy is again under scrutiny. The company is reportedly enduring complex financial maneuvers to sustain its holdings.

While its initial 2025 convertible bond has already been redeemed, concerns remain over the company’s long-term financial stability. Particularly, its ongoing reliance on debt and stock dilution to maintain its Bitcoin purchases spurred controversy.

Stock Dilution & Debt Loom Large Over Strategy

Recently, Strategy (formerly MicroStrategy) announced the launch of a new perpetual preferred stock offering named STRF or “Strife.”

“Strategy today announced the launch of $STRF (“Strife”), a new perpetual preferred stock offering, available to institutional investors and select non-institutional investors,” the firm’s executive chair, Michael Saylor, said.

Some analysts see the move as a desperate attempt to raise cash. Cinneamhain Ventures partner Adam Cochran pointed out that the company faces a precarious financial position. He highlighted that despite its $53 million operating cash flow, it has a negative $1.06 billion in levered free cash flow.

This means that even with Bitcoin’s price appreciation, the company’s financial obligations are mounting.

“These bond issues continue to worsen each year, diluting the equity they’ve been issuing against,” Cochran stated.

MicroStrategy’s 2025 convertible bond had already been redeemed. However, the company still faces a $1 billion debt due in 2027. Further, its new stock offering suggests a growing urgency to address liquidity concerns.

“…So then this desperate yield-bearing perpetual offering 10% compounding, on a company that is 6x its asset value and negatively losing money, also has no near-term use case. You have to work towards the $1 billion 2027 debt, while paying this off,” he added.

Despite these financial pressures, Strategy continues its aggressive Bitcoin purchasing strategy. Earlier this week, the firm bought $10.7 million worth of Bitcoin, its smallest purchase of 2025. This raises questions about whether the company’s cash reserves are beginning to strain under its debt load.

Bitcoin Strategy Faces Increasing Financial Strain

Recently, reports surfaced suggesting that Strategy might be forced to sell some of its $43 billion Bitcoin holdings if financial conditions worsen.

Such a sale could cause downward pressure on Bitcoin’s price. However, experts warn that the biggest risk is to MicroStrategy shareholders, who would suffer a significant decline in stock value.

“Maintaining investor confidence will be crucial for MSTR in the wake of downswings,” the Kobeissi Letter noted.

Another major issue facing MicroStrategy is its ongoing tax dilemma. Analysts have pointed out that the company faces significant tax liabilities. The obligations come as its Bitcoin holdings could further strain its financial position.

“All the debt that MSTR has taken to buy Bitcoin is unsecured against the Bitcoin. There cannot be a margin call against the Bitcoin,” investor British HODL noted.

With a tax burden that could reach billions, questions remain about how the company intends to balance its obligations while continuing to buy Bitcoin.

MicroStrategy’s struggles highlight broader market concerns about highly leveraged Bitcoin strategies. While Saylor has been a staunch advocate of Bitcoin, his approach to financing these purchases has drawn criticism for being excessively risky.

As competition in the corporate Bitcoin investment space grows and investors become more cautious, MicroStrategy’s financial maneuvers will continue to be closely scrutinized.

BeInCrypto data shows Bitcoin was trading for $83,563 as of this writing. This represents a modest gain of 0.89% in the last 24 hours.

Bitcoin’s (BTC) price has historically experienced multiple bear traps. Depending on market conditions, these traps have appeared in short-term phases or larger timeframes.

Some analysts believe that Bitcoin is currently in such a bear trap and that a bull run will begin after the current phase ends.

What Does Bitcoin Bear Trap Cycle Mean?

A bear trap occurs when an asset’s price (such as stocks, cryptocurrencies, or indices) shows a sharp decline. This drop convinces investors that a bearish trend is starting. However, the price soon reverses and rises again, “trapping” those who sold short or exited their positions, expecting further declines.

According to pseudonymous crypto analyst Finish, Bitcoin’s bull run cycles typically last around nine months. A bear trap often appears in the sixth month of the cycle. During this phase, Bitcoin’s price drops sharply, causing panic and sell-offs. But after that, the price recovers and reaches new highs.

Historical data from previous cycles—including 2011, 2013, 2017, 2021, and the current cycle (2024–2025)—show that this pattern repeats consistently.

“2025 cycle is the same. Six-month bear trap, then a new ATH,” Finish predicted.

In his analysis, Finish also explains the driving forces behind bear traps in each cycle. For example, the 2013 bear trap was triggered by the shutdown of Silk Road, an online black market, and China’s ban on Bitcoin, which caused market panic.

In 2017, the ICO boom fueled Bitcoin’s bull run, pushing its price to $20,000. However, a bear trap emerged in the sixth month due to the launch of Bitcoin futures on the CME exchange. This was combined with media hype and concerns over Tether (USDT), which faced transparency issues.

Similarly, in 2021, Bitcoin soared to $69,000. But the six-month bear trap was triggered by an overheated market sentiment and Elon Musk’s sudden shift in stance on Bitcoin payments.

For the 2024–2025 cycle, Finish believes Bitcoin is currently in its bear trap phase. Macroeconomic factors, especially policies from US President Donald Trump, play a crucial role.

Trump’s policies—such as interest rate cuts, tariff war, and his pledge to make the US the “crypto capital” of the world—have created optimism but also caused short-term price volatility. This aligns with the six-month bear trap model described by Finish.

Additionally, analyst Danny agrees with this outlook. He predicts that Bitcoin’s biggest bull run will officially begin in April 2025 once the current bear trap phase ends. Danny suggests that Bitcoin could reach $300,000 by 2026.

“We’re in the Markup phase, just past a classic bear trap. Historically, the biggest gains follow as Bitcoin dominance dips and capital shifts to mid- and low-cap tokens,” Danny predicted.

However, some analysts have lowered their expectations for Bitcoin’s growth. Ecoinometrics observes that Bitcoin’s growth rate in this cycle is significantly lower than in previous cycles. Ki Young Ju, founder of CryptoQuant, has analyzed Bitcoin’s PnL cycle signals and predicts that Bitcoin’s bull run has already ended.

The number of publicly traded companies buying and holding Bitcoin (BTC) has surged to 80 in 2025, a 142% increase from just 33 companies in 2023.

This trend reflects the growing acceptance of Bitcoin as both a strategic reserve asset and a hedge against inflation.

Why Public Companies Are Holding Bitcoin in 2025

Digital asset brokerage firm River revealed that 80 public companies hold Bitcoin, up from just 33 two years ago.

“80 public companies are now buying Bitcoin. Two years ago there were 33. Two years from now there will be…?,” River posed.

The companies embracing Bitcoin span multiple industries, with a strong concentration in technology and finance. The technology sector accounts for half of the public companies holding Bitcoin. Bitcoin Treasuries data shows firms like MicroStrategy (now Strategy), Tesla, and Block stand at the forefront of integrating Bitcoin into their financial strategies.

Financial institutions comprise 30% of the total, including Fold Holdings and Coinbase Global, which have indirect exposure via ETFs (exchange-traded funds). The cryptocurrency mining industry represents 15%, with mining giants such as Marathon Digital and Riot Platforms holding significant Bitcoin reserves.

The remaining 5% comprises companies from other sectors, including retail and energy. These firms experiment with Bitcoin holdings for transactions and balance sheet diversification.

Several key factors are driving the adoption of Bitcoin among public companies. Inflation hedging has become a major consideration as firms look for alternative stores of value beyond traditional assets.

“Bitcoin is the currency of freedom, a hedge against inflation for middle-class Americans, a remedy against the dollar’s downgrade from the world’s reserve currency, and the off-ramp from a ruinous national debt. Bitcoin will have no stronger advocate than Howard Lutnik,” US Health and Human Services Secretary Robert F. Kennedy Jr said recently.

Many companies have also adopted Bitcoin as a treasury reserve strategy, betting on its long-term appreciation. On this matter, firms like Strategy lead the way.

Additionally, investor pressure has played a role as institutional investors and shareholders increasingly push companies to diversify into digital assets. Regulatory clarity and pro-crypto policies in some regions have further encouraged corporate adoption.

Cumulative Bitcoin Holdings Continue to Rise

Meanwhile, public companies have been accumulating Bitcoin at an unprecedented rate. Between 2020 and 2023, they collectively held approximately 200,000 BTC. In 2024 alone, an additional 257,095 BTC was acquired, doubling the total from five years ago.

In the first quarter of 2025, an estimated 50,000 to 70,000 BTC has already been added. Noteworthy, MicroStrategy and Fold Holdings lead the acquisitions. Coinbase’s recent institutional investor survey also indicated that 83% of institutions plan to increase their crypto asset allocation by 2025.

The surge in Bitcoin adoption by public companies coincides with a new wave of crypto-related IPOs (initial public offerings). Notable firms, including Gemini and Kraken, plan to go public, highlighting increased institutional confidence in the digital asset space. These IPOs provide fresh capital inflows and further legitimize the broader crypto market.

Bitcoin has also become a financial lifeline for struggling companies seeking to boost their stock prices. Some firms with declining revenues have turned to Bitcoin investments to attract new investors and strengthen their market position. As a result, Bitcoin is playing an increasingly significant role in corporate strategies.

Despite the impressive growth in corporate Bitcoin adoption, public crypto companies still represent only 5.8% of the total crypto market capitalization, according to a CoinGecko report. This suggests that there is still significant room for expansion.

Beyond corporate treasuries, Bitcoin’s rising adoption also influences financial planning in other areas. Parents increasingly choose Bitcoin as an alternative to traditional college savings plans, betting on its long-term growth potential to fund education expenses.

With 80 public companies now holding Bitcoin, the trend shows no signs of slowing. If the current growth trajectory continues, institutional adoption will deepen as more companies turn to Bitcoin.