MicroStrategy's $2B Bitcoin Bet Adds Froth to Crypto Rally, Raises Concerns of Pullback if Bitcoin Downturns

MicroStrategy has acquired over $2 billion in bitcoin, financed through debt and convertible notes.

The company aims to continue acquiring more bitcoin, which JPMorgan says adds "leverage and froth" to the crypto rally.

If there is a future bitcoin downturn, MicroStrategy's debt-fueled purchases could worsen the deleveraging.

Galaxy CEO Mike Novogratz has also warned that high leverage fueling the bitcoin rally could lead to a price pullback.

MicroStrategy plans to offer another $500 million in convertible debt to keep buying more bitcoin.