Bitwise Chief Investment Officer Matt Hougan has strongly denied recent claims that Strategy may be forced to sell Bitcoin.
Bitwise CIO: “Strategy Doesn’t Have to Sell Bitcoin”
Hougan stated that this view is “completely flawed,” adding that neither index changes nor market pressure have created a situation that would force the company to liquidate its Bitcoin positions.
In a note titled “No Virginia, Strategy Will Not Sell Bitcoin,” sent to investors Wednesday night, Hougan addressed two questions: whether Strategy would be removed from MSCI indexes and whether that would force the company to reduce its multi-billion dollar Bitcoin position.
Hougan noted that MSCI is considering removing companies holding digital asset treasuries from its index, stating that the decision will be announced on January 15th and that there is a 75% chance Strategy will be removed. JPMorgan predicted that such a decision could trigger a $2.8 billion sale of Strategy shares by passive funds.
Despite this, Hougan said the impact of index additions and deletions is often exaggerated. He noted that when Strategy was added to the Nasdaq-100 last year, the price barely moved despite funds purchasing $2.1 billion. He added that the decline in recent weeks had already priced in this potential scenario.
Hougan noted that the real debate was the fear that dropping out of the index could push the stock below its net asset value and force the company to sell Bitcoin, but he emphasized that this was unrealistic. He added that the company has $1.44 billion in cash reserves to cover dividends and debt interest, with the first debt maturity due in 2027.
Strategy purchased another 130 BTC this week, bringing its total holdings to 650,000 BTC. Hougan stated that there is no near-term mechanism that will force the company to sell Bitcoin, and that the market should focus on larger structural issues.
*This is not investment advice.
Source: https://en.bitcoinsistemi.com/bitwises-chief-investment-officer-announces-strategy-firm-has-no-obligation-to-sell-bitcoin/
