MicroStrategy to Issue $500 Million Convertible Bonds with Conversion Price Reaching $2327, Morgan Stanley Concerned about Bubble Risk

MicroStrategy has accumulated 205,000 bitcoins, which are worth about $14 billion at the current market price. This is almost as much as the assets under management of the Bitcoin spot ETF IBIT managed by BlackRock, which is valued at $15.9 billion. Given MicroStrategy’s approach, once its debt issuance plan is successfully completed, it is likely to purchase more bitcoins in the market. This borrowing-to-buy behavior of bitcoins is the leverage and bubble risk that JPMorgan is concerned about. MicroStrategy’s stock price has lingered at around $140 for a long time during the bear market of cryptocurrencies when the price of bitcoin was low, which is more than ten times different from yesterday’s closing price of $1,782.