MicroStrategy’s (MSTR) plan to raise long term debt puts it under pressure to liquidate its bitcoin (BTC) holdings, but only in case of extreme price corrections, especially around its debt expiry which is due in mid-2025, broker Bernstein said in a report Tuesday.

Higher bitcoin prices means MicroStrategy has a stronger balance sheet, a higher share price and easier debt repayment without the need to sell down its cryptocurrency holdings, the report said. Furthermore, strong bitcoin prices and a higher stock price, allows the company to raise new debt or equity and to redeem existing convertible notes, the broker said.

Conversely, if bitcoin crashes and reaches “absolute depressed prices” and the value of MicroStrategy’s cryptocurrency holdings do not cover debt and certain covenants post June 2025, the “corporate structure would come under pressure from ‘spring forward’ clauses – 2028 due debt does have liquidity covenants which could spring forward the debt to 2025/26”, the report added.

“Given bitcoin’s volatility, using debt as a strategy is always precarious, and one-off forced liquidations can never be ruled out completely,” analysts led by Gautam Chhugani wrote.

MicroStrategy holds around 152,000 bitcoin, with a total cost basis of about $4.5 billion, and an average price of roughly $29,600, the note said. The market value of MicroStrategy’s cryptocurrency assets form about 0.78% of the total bitcoin in supply and account for around 20% of daily average BTC trading volume, the analysts wrote.

The market value of bitcoin assets form 95% of the market capitalization of MicroStrategy and net of debt raised to buy BTC, equate to about 49% of the market cap of the company, the report added.

MicroStrategy’s ability to refinance its debt maturities would be greatly enhanced if its share price, and the value of its bitcoin holdings, were to increase meaningfully, investment bank Berenberg said in a report on Monday.

Read more: Michael Saylor’s MicroStrategy Can See Substantial Gains From Bitcoin’s Next Halving: Berenberg