Strategy Halts Bitcoin Buying Spree, Builds $3B Cash Cushion

Strategy (MSTR) has paused its Bitcoin acquisition since June 22, when it purchased just 520 BTC for approximately $35 million, shifting focus to bolstering liquidity. The company sold 3,588 BTC in two transactions during the week ending July 5, generating roughly $216 million and reducing holdings to 843,775 BTC.

Strategy’s Cash Reserve Strategy

■Sold 1,363 BTC for approximately $80.8 million on June 30, followed by 2,225 BTC for $135.2 million.

■Reserves increased to $3 billion, providing 20.4 months of coverage against annualized preferred-stock dividends and debt interest of $1.76 billion.

■Framework supports funding distributions on perpetual preferred securities like STRC and allows up to $1.25 billion in Bitcoin sales to sustain dividends.

Market Risks and Liquidity Mitigation

■Bitcoin’s historical four-year cycle suggests a potential cyclical low later this year, possibly around October, reinforcing the rationale behind Strategy’s cash buildup.

■STRC trades at ~$87, down 0.5% Monday, though recovering from a late-June low near $70, reflecting persistent investor demand for higher yields amid Bitcoin-related and liquidity risks.

■mNAV of ~1.02 on an enterprise basis implies shares trade at a slight premium to net assets, offering flexibility in a prolonged bear market.

Berk Arıcan Note: Strategy’s liquidity buffer of ~20 months is sufficient to weather potential Bitcoin downturns without forced sales. However, the continued discount on STRC signals lingering skepticism about Bitcoin’s risk profile. While the cash cushion strengthens credit perception, the 3,588 BTC sale may have temporarily pressured MSTR’s stock valuation. Long-term, this move could enhance financial resilience, but the market’s reaction to Bitcoin-linked securities remains a critical indicator of investor confidence.