Wall Street veteran predicts MicroStrategy will file for Chapter 11 bankruptcy in 2026

Though the MicroStrategy (Nasdaq: MSTR) stock is more than 2,000% up over the last five years, not everyone is positive about the future of the Bitcoin treasury firm.

Fred Krueger, a Wall Street veteran and mathematician, thinks the company is headed for a massacre in 2026.

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MicroStrategy will launch another preferred stock, Kruger predicts

Krueger predicts a scenario in which Bitcoin is trading at $350,000 and MicroStrategy holds 876,091 BTC worth $307 billion on Aug. 24, 2026. There is speculation around Michael Saylor's firm going for one million coins by 2033.

Next, Krueger imagines a scenario in which the Wall Street veteran Josh Mandell has joined MicroStrategy as the chief product officer on Sep. 11. The firm launches STRX, another of its preferred stock offerings that offers a kicker payment of 6% every time Bitcoin breaks a new $100,000 level Krueger says the offering will sell out in two days.

The firm announces a purchase of 123,909 BTC at an average price of $323,000 with the STRX proceeds, boosting its total holdings to one million BTC, he predicts. MicroStrategy's debt of $60 billion pales in comparison to its total Bitcoin holdings worth $323 billion. "One Nakamoto. A myth made real," Krueger writes.

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Bitcoin hits $410,000 and the firm's BTC stash is worth $410 billion on Oct. 1, he predicts. Though the firm downplays any risks from STRX, the kicker payments will compound the firm’s liability, he warns.

Krueger predicts Bitcoin hitting $437,000 and MicroStrategy's holdings reaching $437 billion on Oct. 12. But the kicker payments on the STRX offering approach $6 billion annually Momentum stalls and bondholders grow uneasy as the price fails to breach the milestone, he imagines the situation.

Story ContinuesBitcoin falls to $300,000 on Oct. 15. While MicroStrategy's Bitcoin stash comes down to $300 billion, its debt remains unchanged at $60 billion. The STRX stock plunges and the holders whose payments are owed in weeks panic, Krueger predicts.

MicroStrategy co-founder Michael SaylorGetty Images Bitcoin then falls to $200,000 and the firm's stash declines to $200 billion on Oct. 19, Krueger predicts. Though Saylor puts on a brave face amid declining stocks, bondholders know the math: "obligations exceed available liquidity by billions." The situation will get bleak as per Krueger.

'MicroStrategy Massacre'

On Oct. 22, MicroStrategy will suspend dividends on STRC and STRX, both plummeting to $42 and 18 cents, he predicts. When Bitcoin further declines to $90,000 on Oct. 26, the firm is forced to sell 50,000 BTC to make payments worth $4 billion.

When Bitcoin dips to $80,000, Krueger says traders will refer to it as "The MicroStrategy Massacre."

A host asks, “Icarus flew too close to the sun, didn’t he?” The veteran analyst imagines Saylor staring silently at the camera.

On Nov. 6, Bitcoin will bottom at $40,000 and MicroStrategy's BTC holdings worth $38 billion will pale in comparison to its debt of $60 billion, Krueger warns. The firm will file for Chapter 11 bankruptcy, and the shareholders will be left with nothing, he predicts.

Disclaimer: The content above is intended for informational purposes only and should not be taken as financial advice. Do your own research before investing.

This story was originally reported by TheStreet on Sep 4, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.

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