MicroStrategy Issues $1.05B Note Redemption Amid Bitcoin Tax Debate

MicroStrategy, the largest corporate Bitcoin holder, has announced a redemption notice for its 2027 convertible senior note tranche, valued at $1.05 billion. The notice, issued on January 24, gives note-holders until February 24 to redeem their securities at full principal value or convert $1,000 blocks into Class A MicroStrategy stock at a rate of approximately $142 per share.

Tax Implications for MicroStrategy

The move comes as the company faces scrutiny over potential tax implications tied to its extensive Bitcoin holdings. Under the Corporate Alternative Minimum Tax (CAMT) outlined in the Inflation Reduction Act of 2022, companies like MicroStrategy could face a tax burden on $19 billion in unrealized capital gains.

In response to this tax landscape, MicroStrategy and Coinbase jointly penned a letter to the U.S. Internal Revenue Service (IRS) earlier this month, arguing that the CAMT imposes “unjust and unintended tax consequences” on firms holding digital assets.

Bitcoin Reserves and Shareholder Concerns

MicroStrategy has amassed a staggering 461,000 BTC, valued at roughly $49 billion, solidifying its position as the largest corporate Bitcoin holder globally. The company’s aggressive acquisition strategy continued into 2025, with its latest purchase on January 21 adding 11,000 BTC to its treasury—the largest single acquisition this year.

Despite these gains, the strategy has drawn mixed reactions . While Bitcoin’s appreciation has boosted MicroStrategy’s investment by nearly 68%, skeptics have raised concerns about its potential downsides. David Krause, a finance professor at Marquette University, warned that Bitcoin’s volatility could jeopardize the company’s financial stability. “A sharp drop in Bitcoin’s price could not only erode shareholder equity but also compromise MicroStrategy’s ability to repay creditors, possibly leading to bankruptcy,” Krause stated.

MicroStrategy’s bold Bitcoin-centric strategy is both a hallmark of innovation and a lightning rod for criticism. Market participants remain divided on whether the firm’s approach to preserving purchasing power will sustain its momentum in the long run, particularly in light of looming tax regulations.