Strategy currently holds more than 840,000 BTC. It has sold bitcoin four times since May, with the most recent sale totaling 1,690 BTC. The company used proceeds from recent sales for preferred stock dividends, share buybacks and to build up dollar reserves.
That has fueled views in the market that Strategy may have moved away from its long-held stance of "never selling." It has become apparent that while it pursues a strategy of expanding bitcoin holdings, it must also consider its obligations to common and preferred shareholders as a listed company.
Le also said Strategy has risen from the world’s No. 2 bitcoin-holding company to No. 1. He also pointed to the fact that the recent sales were limited relative to its total holdings.
Corporate bitcoin treasury strategies overall are also under pressure. Listed companies hold more than 1,260,000 BTC, but that is less than the more than 1,600,000 BTC held by exchange-traded funds and other funds, according to bitcointreasuries.net. As market conditions weaken, some have pointed out that companies are finding it harder than before to maintain a structure in which they raise funds through equity or debt and then use that money to buy more bitcoin.
Novacue Research said this model expanded rapidly in the past when companies’ market valuations traded above the value of the bitcoin they held. When corporate value falls below net asset value, however, raising new funds can impose a greater dilution burden on existing shareholders, making it harder to keep pursuing the same strategy.
Strategy’s latest comments are being read as making clear that the recent sales were not the end of a strategy change but part of cash management. It is expected to remain in focus for now when and how additional bitcoin purchases will actually take place, and what balance the company will choose between shareholder returns and securing dollar liquidity.
