According to a research report by Bernstein, MicroStrategy's decision to sell its bitcoin tokens to pay down debt is closely tied to how the cryptocurrency performs, presenting a sentiment risk in a down cycle. The company owns approximately 140,000 BTC at an average cost of $29,800, worth about $4 billion at current prices, and has $2.2 billion in debt, with repayments due in 2025 and beyond. MicroStrategy has pledged 15,000 of its bitcoins. High BTC prices mean a stronger balance sheet, higher stock prices, and easier debt repayment without selling its BTC holdings. MicroStrategy holds around 0.7% of total bitcoin in circulation, representing about 20% of daily average traded volume in spot markets.

(By Will Canny)