Analysts Warn Strategy’s Bitcoin Buying Spree Evokes Dot-Com Bubble Déjà Vu

▲ Strategy, Bitcoin (BTC), U.S. Dollar (USD), Dot-com Bubble / ChatGPT-generated image

Market concerns are deepening as experts warn that Strategy’s large-scale Bitcoin (BTC) purchasing strategy resembles the overheating patterns seen during the dot-com bubble.

According to cryptocurrency media outlet CryptoPotato on February 24 (local time), market analysts have diagnosed parallels between Strategy’s aggressive accumulation of Bitcoin through debt financing and the behavior of companies during the late-1990s dot-com boom. The strategy led by Michael Saylor is cited as a significant risk factor because it effectively ties the company’s value entirely to fluctuations in a single asset’s price.

Some market experts pointed out that Strategy’s stock price is trading at an excessive premium compared to the actual value of the Bitcoin it holds. They argue that the way Strategy’s shares are valued mirrors how internet companies in the past inflated stock prices based solely on future potential without solid revenue structures. In particular, warnings have followed that a sharp decline in Bitcoin’s price could trigger a chain reaction of debt repayment pressure and a simultaneous plunge in the company’s stock.

Strategy has recently intensified its accumulation efforts by issuing billions of dollars in convertible bonds to purchase additional Bitcoin. The company currently holds hundreds of thousands of Bitcoins, and its average purchase price is seen as serving as a psychological support level if Bitcoin’s price falls. However, experts caution that a structure reliant on excessive borrowing to acquire assets could become a dangerous trigger for a broader liquidity crisis across the market.

Saylor continues to maintain an aggressive buying stance, defining Bitcoin as a long-term store of value and the company’s core asset. He argues that Bitcoin will solidify its status as digital gold and that current volatility is an inevitable part of growth. However, investors who experienced the collapse of the dot-com bubble are wary of the devastating consequences that excessive optimism can bring and are closely watching Strategy’s financial structure and debt ratio.

Bitcoin is currently experiencing heightened volatility around the $60,000 level. Meanwhile, Strategy’s massive holdings are also perceived as potential selling pressure in the market. Experts noted, “For Strategy’s approach to succeed, it must be supported by continued appreciation in Bitcoin’s price,” adding, “But amid growing macroeconomic uncertainty, it is difficult to guarantee what outcomes such a near-gamble-like bet may produce.” Market attention is focused on whether Strategy’s move will remain an innovative financial experiment or become a symbol of a bursting bubble.

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