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Analyst Warns: Strategy On Track For Historic Collapse, Bigger Than FTX
- On-chain analyst OxChain raised concerns about a potential catastrophic collapse involving Strategy, a Bitcoin proxy firm co-founded by Michael Saylor, surpassing the FTX collapse.
- OxChain suggested that Strategy's aggressive Bitcoin accumulation tactics resemble a Ponzi scheme.
- Since 2020, Strategy has become a major player in the Bitcoin market, holding around 582,000 BTC valued at nearly $61 billion.
- The analyst highlighted that Strategy's approach involves a cycle of raising capital, purchasing Bitcoin, and driving stock prices up through announcements.
- OxChain believes Strategy's risk exposure is increasing, especially with a new $1 billion share sale.
- The analyst warned about major liquidation risks for Strategy if Bitcoin's price falls significantly below their average cost per Bitcoin of $70,000.
- Strategy disclosed $5.9 billion in unrealized Bitcoin losses in Q1 2025, under new accounting standards, leading to legal repercussions.
- Shareholders filed a lawsuit alleging that Strategy concealed risks associated with Bitcoin volatility while raising capital aggressively.
- OxChain mentioned that Strategy's role as a Bitcoin access point is diminishing as institutional capital flows into more regulated options like IBIT from BlackRock.
- Strategy's potential collapse could have far-reaching implications as the firm holds a significant portion of Bitcoin's total supply, with liquidation risks looming.
- A decline of Bitcoin's price by 22% from Strategy's average buy price could trigger massive corporate liquidations.
- OxChain depicted Strategy as a risk vector heavily reliant on leverage and market sentiment, not fitting into clear hero or villain roles in the crypto ecosystem.
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