After a 7% daily drop in Bitcoin’s price, speculation spread online that Strategy might be preparing to sell some of its 650,000 BTC holdings. The company’s stock (MSTR) also declined, and recent comments from CEO Phong Le about possible sell conditions drew further attention.
Though the concerns gained traction on social media, including criticism from long-time Bitcoin skeptic Peter Schiff, current information suggests Strategy is not under immediate pressure to sell any of its holdings. In fact, it just bought more Bitcoin:
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When Would Strategy Sell?
Phong Le recently said that selling Bitcoin would only happen as a “last resort”. He described two conditions: the company’s market cap would have to fall below the value of its Bitcoin (mNAV < 1), and Strategy would need to lose access to capital markets – meaning it couldn’t raise money through debt or equity.
At the moment, neither condition is fully met. Strategy still has access to capital, and while the stock is trading below the value of its Bitcoin, the company has already taken steps to strengthen its position.
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Building a Cash Buffer
Strategy recently announced a $1.44 billion cash reserve funded entirely through equity issuance, not Bitcoin sales. This reserve is set aside to cover dividends and interest payments for about 21 months. It gives the company time and flexibility, even if the capital markets tighten.
The move helps address concerns around cash needs and gives Strategy the ability to stay on course with its Bitcoin strategy regardless of short-term stock performance.
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Responding to Critics
Peter Schiff responded to the recent market drop by claiming Strategy’s model is unsustainable and that it’s selling shares just to keep up with debt. While those comments received attention, they’re in line with Schiff’s long-standing criticism of Bitcoin and Strategy’s approach.
The company has not sold any Bitcoin since beginning its accumulation in 2020. Instead, it has used equity and debt to raise funds – most recently to build a reserve, not to unwind its BTC position.
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Current Position
Strategy holds more than $55 billion in Bitcoin at an average cost of around $74,436 per coin. Even after the recent price correction, the position remains in profit. Though its stock now trades at a discount to its BTC holdings, the company has been in similar conditions before without selling.
With a sizable reserve in place and access to capital still open, a Bitcoin sale doesn’t appear necessary at this point. The company’s messaging and financial position suggest it’s prepared to hold through short-term volatility.
