Important points
- Strategy CEO Von Leh surprised investors last week by announcing the potential sale of Bitcoin under specific circumstances.
- The enterprise software company hasn’t sold any Bitcoin since launching CoinTreasury in August 2020.
- Strategy stocks have declined roughly 60% since reaching a peak in July.
It seems that numbers may take precedence over belief.
Strategy (MSTR), known for its investment in Bitcoin, recently caught investors off guard with a statement about possibly selling. While Chairman Michael Saylor has always promoted the idea of holding onto Bitcoin indefinitely, insisting he wouldn’t change course, CEO Von Leh’s comments introduced the notion of selling under particular conditions.
This shift comes at a time when the market appears to be heading into a downturn, often referred to as crypto winter, especially after they’ve held onto their Bitcoin since establishing the Bitcoin Vault over five years ago. With Bitcoin experiencing a significant dip—around 30% from its recent highs—and with Strategy’s stock performance worsening, there’s a possibility that short-term selling might occur, possibly driving down prices further.
One of the conditions set by Lee suggests that if the company’s market capitalization falls below the worth of its Bitcoin holdings, a sale may be considered. Since hitting an all-time high in July, Strategy’s stock has dropped 60%, placing its market cap alarmingly close to the value of their Bitcoin, although a recent uptick in stock prices is correlated with Bitcoin’s rebound.
Why this matters to you
Michael Saylor, co-founder and executive chairman of Strategy, is a prominent figure in the Bitcoin space and keeps a keen eye on market movements. Should Strategy decide to sell Bitcoin, it could potentially disrupt the crypto market and lower Bitcoin prices.
“I hope our market net asset value doesn’t fall below 1, but if it does and I can’t access other funds, I’d sell my Bitcoin,” he shared in an interview last week. “There’s a mathematical part of me that thinks that’s the logical option.”
Blockchain analysis firm Artemis assessed Strategy’s market net asset value (mNAV) at 1.01.
Saylor defended the idea of selling Bitcoin recently, stating, “We aim to make rational decisions that serve our stockholders’ best interests. Some people suggest that selling Bitcoin shows a lack of commitment. That’s simply not accurate.”
The news about the potential sale drew mixed reactions online, with some criticizing and others supporting the company following a rise in cryptocurrency values. After dropping to as low as $84,500 over the weekend, Bitcoin climbed back above $91,000 on Tuesday, which saw Strategy stock increase by approximately 6%.
Additionally, the company revealed that it acquired another 130 bitcoins, bringing its total to 650,000 coins, valued at around $59 billion based on current prices. They also allocated $1.44 billion for dividends on preferred stock and interest on debts, revising their 2025 earnings outlook with a projected year-end Bitcoin price between $85,000 and $110,000. Previously, they had forecast Bitcoin to be approximately $150,000 by the end of the year.
