Matt Hougan Slams Talk of Forced Bitcoin Selling at Strategy

Strategy’s large Bitcoin reserve has become a talking point again after recent comments from its CEO raised questions about whether the firm might sell part of its holdings. Bitwise chief investment officer Matt Hougan pushed back on those worries in a note on Tuesday. He stated that claims about forced selling tied to Strategy’s stock performance are incorrect. 

Hougan cited chairman Michael Saylor’s long standing commitment to Bitcoin as a sign that the company is unlikely to shift course.The executive said the concern centers on the idea that a drop in Strategy’s share price below its net asset value would trigger a need to sell. 

He argued that such conditions do not apply to the company and pointed to its current structure. This includes no debt coming due until 2027 and enough cash to handle interest payments well into the future. 

Hougan also noted that selling its entire Bitcoin supply, valued at about $60 billion, would be harmful to the broader market since it equals roughly two years of inflows into Bitcoin exchange traded funds. He added that he does not see any reason the company would be pushed into that position.

CEO’s Earlier Comments Sparked Market Reaction

Concerns grew last week when CEO Phong Le said that if Strategy’s market value fell below the value of its Bitcoin holdings and other financing channels failed, the firm might consider selling some coins as a last option to support its Bitcoin yield per share. The comment came during a period of weakness in the crypto sector and at a time when Strategy is facing the possibility of removal from the MSCI index.

Hougan countered that the company has room to operate even during a downturn. Bitcoin trades near $92,000, which he said is about 24% above the average price Strategy paid for its reserve. He added that the company holds $1.4 billion in cash, enough to cover its yearly interest obligation of about $800 million for at least a year and a half. 

Strategy shares have fallen 24.69% in the past month, closing at $186.01 on Friday.

Index Changes Add Extra Pressure

Market pressure has also come from a statement by Morgan Stanley Capital International in October. The group said it may remove from its indices any firm whose balance sheet holds more than half of its value in crypto assets. Such a move would require funds that track those indices to sell Strategy shares, adding stress to the stock.

Hougan said past cases show that index decisions often produce smaller effects than expected and that markets tend to adjust well before the change takes place. He pointed to Strategy’s addition to the Nasdaq 100 last December, when funds needed to buy $2.1 billion worth of shares, yet the stock saw little movement.