Founder of China’s mining pool BTC.TOP: Even if Bitcoin drops to $30k, it can’t shake the Strategy; the interpretation of panic selling has been overdone

China's largest Bitcoin mining pool BTC.TOP founder Jiang Zhuoer recently posted on X platform, analyzing and calming the market's panic over Strategy (formerly MicroStrategy) potentially being forced to sell large amounts of Bitcoin over the past week. He straightforwardly stated that even if Bitcoin drops to $30k, Strategy's debt-to-asset ratio would only rise from the current 5% to about 10%, far from forcing a liquidation. The company's "never sell Bitcoin" market image will not change in the short term.

Fidelity custody wallet outflow of 45k BTC, no need for overinterpretation

The source of this panic stems from on-chain analyst estimates that approximately 45k Bitcoin (worth about $3 billion) were transferred out of a Fidelity custody wallet between May 28 and June 1. Market speculation suggests Strategy has been selling these Bitcoins in batches, at an average price of around $66k. However, Jiang Zhuoer pointed out that this wallet also holds Fidelity's own Bitcoin and spot ETF assets in Ethereum, and attributing the outflow solely to Strategy is purely speculative, not confirmed selling activity.

He posted in Chinese on Sunday, directly stating that this wave of panic "has been exaggerated." Bitcoin experienced a sharp decline last week, and the news that Strategy sold Bitcoin for the first time since 2022 triggered market sentiment, with BTC approaching $62k, hitting a six-month low. CoinDesk data shows Bitcoin traded around $63,400 on Monday, with nearly a 10% decline over the past week.

Debt only accounts for 5% of assets, stress test at $30k only 10%

Jiang Zhuoer’s core analysis is based on Strategy’s balance sheet. He estimates that Strategy’s total liabilities currently only account for about 5% of its Bitcoin assets. Even if Bitcoin plunges from around $62.9k to $30k, this ratio would only rise to about 10%. For a publicly listed company holding over 770k Bitcoins with assets exceeding $40 billion, such leverage levels are well below warning thresholds.

In other words, Strategy has no urgent pressure to sell Bitcoin to cover debts. Any argument that company will "massively liquidate" due to falling prices lacks support from the balance sheet. This also echoes earlier analysis suggesting that fears of a "LUNA-style death spiral" may be overstated, as Strategy’s debt structure is fundamentally different from algorithmic stablecoins.

STRC preferred shares: selling old for new, net buyer stance unchanged

Jiang Zhuoer also provided a detailed defense of Strategy’s primary financing tool, the STRC preferred shares. STRC pays an 11.5% annual dividend, distributed monthly. Strategy’s strategy is to sell the Bitcoin with the lowest cost basis and oldest age, realizing accounting profits to pay dividends; meanwhile, the funds raised from the new issuance of STRC are reinvested to buy new Bitcoin.

The key point: "As long as the rate of buying continues to exceed the rate of selling, Strategy remains a net buyer." Jiang Zhuoer further pointed out that the real concern for STRC holders is not the company selling Bitcoin, but the company "refusing to sell Bitcoin and defaulting on dividends." Therefore, Strategy’s willingness to sell Bitcoin to fulfill its obligations actually alleviates investors’ biggest uncertainty and is a positive signal for STRC’s market valuation.

Long-term bear market skeptics’ rebuttal

However, not everyone in the market shares Jiang Zhuoer’s optimism. Some analysts argue that if Bitcoin enters a prolonged bear market, Strategy’s interest expenses will continue to accumulate, and ultimately, regardless of management’s intentions, the company might be forced to sell larger amounts of Bitcoin. In other words, short-term stress testing of the balance sheet is static; what truly matters is the dynamic cash flow pressure. If STRC’s new issuance stalls or dividend payments deplete reserves, Strategy’s "never sell Bitcoin" myth could be challenged.

This debate is set against the backdrop of Bitcoin’s nearly 10% drop last week due to Strategy’s selling news. However, Jiang Zhuoer, from China’s leading mining industry, offers a different perspective from Wall Street analysts: the Asian mining community generally believes Strategy’s balance sheet is far more stable than the market perceives. The recent panic-driven sell-off might instead be a misjudged opportunity for strategic positioning after a sharp decline.