Will Strategy Be Forced To Sell Its $50B Bitcoin? Company Shares Game Plan

Strategy, a business intelligence company founded by Michael Saylor, has released new data outlining how its Bitcoin (BTC) position holds up under current market conditions. This disclosure raises the question of whether the company could ever be forced to sell its $54.59 billion in Bitcoin holdings. Its latest internal projections, shared publicly, highlight the firm’s expectations for long-term sustainability while also inviting scrutiny of its historic aggressive accumulation strategy. 

Strategy Confirms BTC Reserves Cover Dividends For Decades

The Strategy team stated on X this Thursday that with Bitcoin trading below $85,000, the company has more than enough coverage to maintain its dividend obligations for 71 years even if the price remains flat. Additionally, if Bitcoin’s price grows by more than 1.41% annually, that growth alone would completely neutralize the firm’s dividends without requiring additional funds.  

Strategy shared its internal credit dashboard, which tracks details such as debt maturities, durations, interest exposure, and Bitcoin risk. The report shows a total debt of $8,214 and a matching cumulative national value. Most of this comes from the company’s Bitcoin-linked preferred instruments, including various STR-series tranches, totaling $7,779 and with a combined notional value of $15,993. 

Durations across these instruments range from under 2 years to nearly 10, with BTC risk concentrated in the low single digits. Overall, the combined debt and preferred structure totals $15,993. The company’s model also assumes a Bitcoin price of $87,300, a volatility of 45%, and an expected annual return of 30%. 

According to Strategy, these numbers indicate that the firm has plenty of financial flexibility. The company has shown that its dividend security does not rely on aggressive Bitcoin price growth. Although its balance sheet is tied to BTC’s market performance, Strategy’s internal credit analysis suggests it can withstand extended periods of sideways price action without liquidating its core holdings. 

Saylor Faces Criticism For Persistent Bitcoin Buys

In a separate update, Strategy highlighted its actions during the 2022 crypto winter, which was marked by a widespread market collapse. When the price of Bitcoin dropped to $16,000, roughly 50% of Strategy’s then-average cost basis of $30,000, the firm increased its position rather than pulling back. 

This reminder resurfaced longstanding criticisms from market participants who argue that the company’s approach relies too heavily on constant averaging up. The CEO of SwanDesk, Jacob King, criticized Saylor, claiming that the Strategy founder has not shown any real investment ability. 

King pointed out that since Saylor’s first BTC purchase at around $11,000, the cryptocurrency has surged roughly 1,000%. In contrast, Strategy has generated only a 22% return over five years, equating to about 4.4% per year. King described this performance as “horrible,” attributing it to the firm’s seemingly flawed strategy of persistently buying Bitcoin at higher prices. 

The SwanDesk CEO also highlighted Saylor’s history in the tech sector, noting that he had wiped out nearly 99% of his net worth during the dot-com era by chasing underperforming tech stocks and restating the firm’s financials under the scrutiny of the US SEC. 

Featured image from Getty Images, chart from TradingView