I was reading this article about Bernstein, CEO of MicroStrategy and he gave very positive thoughts on how institutional repayments for their debts work without actually hampering the prices of Bitcoin in the real market.
For example, their balance sheets are worth billions of dollars and so as to their debts in the long-running business. One may think that so many debts must be pulling down the bitcoin price in the market that we trade. Like, someone may think it's huge concentrated debt and thus could aggravate the market to go bear if they start selling in large chunks.
However, he stated that though the debts are heavy, they are paying it in installments,s and thus compare to the market volume the sold bitcoins are nothing.
Even if you think about all the institutional debts out there combined, it has a tiny effect on the market. This could be probably because of the large volume of buying and selling.
Apart from this, these institutes are gaining a good grip on profits. Whenever the prices are going up in the market, they have very strong balance sheets and thus they easily pay off debts and keep holding an even better amount of bitcoins.
Rising bitcoin prices mean a stronger balance sheet, higher stock prices and easier debt repayment, without the company needing to sell its holdings, the report said.
Whether MicroStrategy (MSTR) sells its bitcoin (BTC) tokens to pay down debt is closely tied to how the cryptocurrency performs. The position is not large enough to distort prices but it does present a sentiment risk in a down cycle, Bernstein said in a research report Wednesday.
The business analytics software company is the largest corporate holder of bitcoin as a balance sheet treasury asset, owning around 140,000 BTC at an average cost of $29,800. The stash is worth about $4 billion at current prices, the report said.
The company has about $2.2 billion in debt, with repayments due in 2025 and beyond. It has pledged 15,000 of its bitcoins, Bernstein said.
“High BTC prices mean a stronger balance sheet, higher stock prices and easier debt repayment without selling its BTC holdings,” analysts Gautam Chhugani and Manas Agrawal wrote.
MicroStrategy holds around 0.7% of total bitcoin in circulation, representing about 20% of daily average traded volume in spot markets, the note said.
At those levels, MicroStrategy does not “necessarily pose a concentration risk” even if trading volumes fell during a bear market, though it may affect market sentiment.
“The potential liquidation of MicroStrategy’s BTC during bear markets creates an overhang for BTC in a down cycle,” it said.
MicroStrategy’s Bitcoin Holding Doesn’t Necessarily Pose a Concentration Risk: Bernstein 
