Strategy holds 844,447 bitcoin but faces risks if funding dries up

An analysis said Strategy’s bitcoin accumulation strategy is more heavily influenced by access to capital markets than by the bitcoin price.

Cointelegraph reported on Monday that Strategy bears about $1.76 billion a year in dividend and interest costs. It said that if new fundraising is blocked, the company could struggle to cover those costs without selling bitcoin.

Cryptocurrency analytics platform Lezim Intelligence pointed to structural risks embedded in Strategy’s holdings of 844,447 bitcoin. It said the assets are entangled with about $22 billion in debt and preferred stock claims, meaning the company must keep raising funds in capital markets to maintain its bitcoin-buying model.

Lezim said Strategy’s debt structure differs from typical bitcoin-collateralised margin loans. It said there are no margin calls linked to bitcoin price declines, meaning it is not a structure that forces immediate liquidation even if prices fall. It also said its stress test showed that bitcoin would have to fall about 96 percent before Strategy reaches a level at which it cannot cover its convertible bonds with its bitcoin holdings and liquid assets.

But preferred dividends and interest must continue to be paid regardless of the bitcoin price. Lezim Intelligence analyst Sherif Saad (셰리프 사드) said continuing to raise funding to cover annual debt and preferred stock costs is Strategy’s core task.