Interesting scenario. If they failed then all the TradFi and normies would take it as Bitcoin’s catastrophic failure and we would see sell off like never before. Now comes the hard part. Would it recover? I think yes. Panic is the first reaction and then there comes reflection and reasoning.

The important point would be the reason of MSTR’s failure. If it is outside Bitcoin like leverage, liquidity etc then sell off would be temporary but if it is for example custodian being hacked and coins stolen then this might be something that any TradFi investor would need to take into account.