CryptoQuant: MicroStrategy hoards $1.44 billion to prepare for the bear market, Bitcoin could fall below $55,000

According to a report by CryptoQuant, MicroStrategy set up a $1.44 billion USD reserve earlier this week, signaling that the company is preparing for a Bitcoin bear market. Julio Moreno of CryptoQuant stated that the bear market began at the start of last month, and if this continues, Bitcoin’s trading price next year could be between $55,000 and $70,000.

MicroStrategy’s Strategic Intent Behind the $1.44 Billion Reserve

Earlier this week, Michael Saylor’s Bitcoin fund management company MicroStrategy (stock symbol: MSTR) established a $1.44 billion reserve to pay dividends on its preferred stock and interest on outstanding debt. According to on-chain analytics firm CryptoQuant, this move indicates that MicroStrategy is preparing for a potentially weak market environment.

CryptoQuant wrote in its December 3 report: “The strategy seems to acknowledge that the possibility of a deep or prolonged decline in Bitcoin cannot be ignored. Establishing a 24-month USD buffer suggests they expect Bitcoin to consolidate or decline for an extended period, and that the capital markets’ appetite for future Bitcoin issuances may diminish.”

MicroStrategy’s recently raised USD reserve, obtained by issuing shares at market price, is intended to cover at least 12 months of dividend payments. The company stated that it plans to gradually increase the reserve, aiming to cover dividend payments for 24 months or more. This forward-looking liquidity management demonstrates that even the most committed institutional Bitcoin holders are starting to seriously consider the risks of cyclical market adjustments.

CryptoQuant noted that this dual-reserve model—holding both USD and Bitcoin—reduces the risk of being forced to sell Bitcoin during economic downturns. At the same time, it also marks a “tactical shift” in strategy, moving away from MicroStrategy’s previous approach of issuing stock and convertible bonds between 2020 and November 2025 to buy more Bitcoin.

The deeper implication of this shift is that MicroStrategy no longer sees “infinite leverage to buy Bitcoin” as its sole strategy. Over the past five years, the company continuously issued convertible bonds and additional stock to raise funds and kept buying Bitcoin regardless of its price—a strategy once seen as the ultimate expression of long-term faith in Bitcoin’s value. However, the establishment of a $1.44 billion USD reserve shows that management is starting to balance idealism with financial reality.

Warning Sign: Bitcoin Purchases Plummet by 99%

(Source: CryptoQuant)

MicroStrategy’s Bitcoin purchase volume in 2025 has been slowing, the clearest signal of a strategic shift. CryptoQuant reported that monthly purchases have dropped from 13,400 Bitcoins to just 135 in December, a 99% decline. This sharp drop is not only a quantitative change but also represents MicroStrategy’s move from being a major market buyer to a bystander.

MicroStrategy Purchase Volume Changes

November 2024: Purchased 13,400 Bitcoins, about $1.24 billion

November 2025: Purchased 9,100 Bitcoins, about $840 million

December 2025: Purchased 135 Bitcoins, about $12.5 million

Drop: Down 99% From the Peak

CryptoQuant stated: “This shift has significant implications for the Bitcoin market. On one hand, MicroStrategy’s reduced marginal Bitcoin purchases weakens a previously strong demand channel that fueled bull market cycles. On the other, USD reserves and newly disclosed hedging/selling capabilities significantly reduce the likelihood of panic-driven Bitcoin dumping, ultimately favoring long-term market stability.”

The collapse in purchasing volume has a substantial impact on market sentiment. In recent years, the market has grown accustomed to regular announcements of “MicroStrategy bought again,” which often triggered short-term price rallies and boosted confidence. MicroStrategy’s continuous buying was seen as an “invisible support” for Bitcoin prices, and its purchases were even used by some investors as trading signals. Now that this support is gone, the market needs to find new sources of demand.

CryptoQuant added that MicroStrategy no longer regards its Bitcoin holdings as untouchable in any market environment. Management now acknowledges that protecting Bitcoin assets requires flexibility, including cash buffers, hedging, and selective monetization during downturns. This attitude shift means even the most committed Bitcoin believers are beginning to accept the possibility of “strategic exits.”

CryptoQuant Prediction: BTC Could Fall to $55,000

CryptoQuant stated that MicroStrategy’s shift from aggressive Bitcoin accumulation to a more conservative, liquidity-focused fund management approach coincides with Bitcoin experiencing its largest drop in 2025. The firm noted that nearly all major on-chain and technical indicators now show that the market has entered a bear phase. CryptoQuant’s bull market score index recently dropped to zero—the lowest bear market level since January 2022.

Julio Moreno, CryptoQuant’s head of research, told The Block that if the bear market continues, Bitcoin’s trading price next year could range between $55,000 and $70,000, with $55,000 being the “most pessimistic scenario.” This prediction implies a 40% to 25% downside from the current price of around $92,700.

Moreno added that MicroStrategy’s establishment of a USD reserve indicates a “slightly higher” possibility of selling, but emphasized that this would be a last resort, with the company first turning to Bitcoin derivatives. This layered response strategy shows MicroStrategy is building multiple lines of defense: the first is the USD reserve to pay routine expenses and dividends, the second is using Bitcoin derivatives for hedging, and the final line is actually selling Bitcoin.

This price prediction is not baseless. CryptoQuant’s bear market call is based on several on-chain indicators: long-term holders starting to distribute coins, increased net inflows to exchanges, rising miner selling pressure, and the loss of key technical support levels. Historically, these indicators have accurately signaled the start of the 2018 and 2022 bear markets.

Mizuho Bank Stands Firm: Selling BTC is a Last Resort

On Wednesday, investment bank Mizuho Securities also released a report reiterating its “outperform” rating on MicroStrategy stock and a target price of $484. Mizuho stated that it held an investor Q&A on Tuesday attended by MicroStrategy CFO Andrew Kang.

Key Takeaways From Mizuho Bank’s Q&A

USD Reserve Positioning: A liquidity risk management tool, not a precursor to Bitcoin selling

Reserve Increase Conditions: Will further increase reserves using favorable market conditions when its net asset value multiple (mNAV) is above 1

Operational Sustainability: At the current Bitcoin price of around $92,700, the company can maintain operations and dividends for over three years

Selling Conditions: Selling Bitcoin is viewed as a last resort, only to be considered if net asset value (mNAV) remains below 1 for an extended period

Mizuho stated: “Selling Bitcoin is considered a last resort, only to be undertaken if net asset value (mNAV) remains below 1 for a prolonged period. The reserve serves as a buffer, preventing forced asset sales and enabling the company to weather long-term downturns in the crypto market.”

This multi-layered defense mechanism demonstrates that MicroStrategy is transitioning from being a “pure Bitcoin bull” to a “savvy Bitcoin asset manager.” The $1.44 billion USD reserve is not an abandonment of Bitcoin, but a means to preserve its Bitcoin holdings even in the worst-case scenario. This strategic shift could provide a reference template for other institutional investors: how to maintain long-term faith in Bitcoin while building sufficient financial buffers to withstand market cycles.