Behind MicroStrategy's Reserve of 660,000 Bitcoins: A Matter of Faith or a Defensive Signal?

Strategy (formerly MicroStrategy) announced a major financial adjustment on December 1, 2025: establishing a $1.44 billion USD cash reserve while purchasing 130 bitcoins. After this acquisition, the company’s total bitcoin holdings reached a historic high of 650,000 coins, with a total purchase cost of approximately $48.38 billion and an average cost of $74,436 per coin.

Subsequently, from December 1 to December 7, Strategy acquired 10,624 bitcoins for about $962.7 million, at an average price of approximately $90,615 per coin. As of December 7, 2025, Strategy held 660,624 bitcoins, with a total cost of about $49.35 billion and an average cost of roughly $74,696 per coin.

This move came against the backdrop of bitcoin’s price falling from an October high of about $126,000 to around $90,000 in early December. As they continue to accumulate bitcoin and amass massive cash reserves, the strategic intent of the world’s largest publicly traded bitcoin holder is drawing deep market analysis.

01 Strategic Shift: From “Infinite Ammo” to Building a Cash Moat

MicroStrategy’s latest actions clearly demonstrate a dual-track strategy: while firmly holding and increasing its bitcoin position, it is placing unprecedented emphasis on financial security and cash flow stability.

From November 17 to 30, 2025, MicroStrategy spent about $11.7 million to purchase 130 bitcoins at an average price of around $89,960 per coin.

This move brought Strategy’s total BTC holdings to the milestone of 660,000 coins, accounting for about 3.1% of the total bitcoin supply (21 million coins).

More crucially, the company established a $1.44 billion cash reserve. This fund was raised by selling about 8.214 million shares of its Class A common stock through its “at-the-market issuance program,” raising net proceeds of $1.478 billion.

02 Deeper Logic: Threefold Considerations Behind the Defensive Shift

MicroStrategy’s “cash hoarding” strategy is not a spur-of-the-moment decision, but rather a key defensive line to protect its business model and credit system under current market conditions.

The primary goal is to safeguard the company’s credit. MicroStrategy has issued several series of preferred shares and promised annual dividend yields of 8% to 10%. The $1.44 billion reserve is earmarked to cover preferred share dividends and debt interest payments for the next 21 months.

This move aims to “decouple” shareholder returns from bitcoin’s short-term price volatility, sending a strong signal to creditors and investors that the company can fulfill its payment commitments even during market downturns, thereby avoiding the vicious cycle of “credit rating downgrade → rising financing costs.”

Secondly, it is to guard against the worst-case “death spiral” risk. The market’s biggest concern is whether MicroStrategy would be forced to sell bitcoin to maintain operations if bitcoin’s price keeps plunging.

CEO Phong Le has made it clear that selling bitcoin would only be a “last resort under extreme circumstances,” subject to two strict conditions: the share price drops below the per-share net asset value of its bitcoin holdings, and the company simultaneously loses access to equity and debt financing markets.

Analysts note that only if bitcoin’s price falls to around $25,000 would MicroStrategy approach insolvency on paper. At current prices, its bitcoin holdings still have significant unrealized gains.

03 Market Impact: Whale Moves Stir Market Nerves

As a “whale” holding more than 3% of the total bitcoin supply, every move by MicroStrategy has an undeniable impact on market sentiment and price trends.

Its strategic pivot—especially the slowdown in bitcoin purchases and cash accumulation—may be interpreted by the market as a lack of confidence in the short term, putting additional pressure on bitcoin’s already fragile price.

After MicroStrategy announced the cash reserve, its stock price (MSTR) dropped more than 10% during trading on December 1. This indicates investor concern and even dissatisfaction over the company diluting equity for fiat rather than bitcoin.

However, from a more macro and long-term perspective, the structure of the bitcoin market has fundamentally changed. Compared to when MicroStrategy first started buying, today’s bitcoin market depth and institutionalization are on a different level.

Spot bitcoin ETF managers now hold hundreds of thousands of bitcoins, and sovereign wealth funds and corporate treasuries worldwide are continuously allocating to bitcoin. This means that even if MicroStrategy becomes a forced seller in the future, it will face a much larger pool of buyers than in the past, partially buffering the price impact of any sell-off.

04 Individual Investors: Finding Position Amid Institutional Maneuvers

For ordinary crypto investors, the strategic adjustments of leading institutions are important market signals, but it’s even more crucial to understand the underlying logic and reassess one’s own investment strategy accordingly.

MicroStrategy’s establishment of a cash reserve can be seen as preparation for a possible “long winter.” This reminds all investors that no matter how much faith one has in an asset’s future, maintaining sufficient liquidity and risk management capabilities is the key to survival.

Investors should not blindly follow every institutional move, but instead consider how these decisions align with their own investment goals, risk tolerance, and time horizon. One of MicroStrategy’s core missions is to serve its preferred shareholders, which fundamentally differs from the interests of individual investors.

In the current market environment, investors might focus more on price trends and market sentiment indicators on liquid, secure, and compliant trading platforms like Gate. At the time of writing, according to Jinse Finance, BTC price has rebounded above $91,000.

This volatility once again highlights the high-risk nature of the crypto market. Whether institutional or individual, everyone needs a strategy that can protect them amid wild swings and offer a chance to capture long-term value.

Outlook

MicroStrategy’s $1.44 billion cash reserve stands as a conspicuous barrier between itself and bitcoin price volatility.

The company’s 660,000 bitcoins quietly sit in a digital vault, accounting for 3.1% of the global bitcoin supply and valued at over $48 billion. Its stock, MSTR, plunged over 10% on the day the cash reserve was announced.

Meanwhile, the bitcoin market itself is becoming deeper and broader, with spot ETFs and other institutions’ continuous buying building a more complex network of buyers.

This company’s fate remains the best case study for observing how institutions convert conviction into a sustainable financial strategy.