Strategy CEO Explains Bitcoin Holdings Plan and Financial Discipline

Strategy, formerly known as MicroStrategy, is working to reassure investors amid crypto market volatility and growing uncertainty. 

In a recent interview, the company’s CEO Phong Le explained how the company stays committed to Bitcoin (BTC) while managing its finances carefully.

Strategy Would Sell Bitcoin Only as a Last Resort, CEO Says

In a recent interview, Le explained that the company would only consider selling its Bitcoin under very specific conditions. This would occur if the company’s stock price fell below its net asset value (NAV) and if new sources of capital were no longer available. 

In such a situation, selling Bitcoin would become necessary to protect the yield per share linked to the flagship crypto. He stressed that this action would be a last resort rather than a change in company policy, Le said highlighted the importance of prioritizing financial discipline over emotion during hostile market conditions.

Strategy Uses Share Premiums to Fund Bitcoin Strategy and Dividends

The company’s strategy focuses on raising capital when its shares trade above their net asset value. The capital raised is then used to purchase additional Bitcoin, increasing the amount of Bitcoin held per share. 

If the premium over net asset value disappears, selling some Bitcoin to meet obligations could be acceptable to shareholders. This is especially if issuing new shares would significantly dilute existing holdings. 

This approach is particularly important because the company faces increasing financial obligations from preferred shares issued over the past year. Annual payouts on these shares are approaching $750 million to $800 million.

The plan is to fund these obligations primarily through capital raised when shares trade at a premium. This method lets the market anticipate that dividend payments will continue even during weaker periods. 

Beyond the mechanics of the balance sheet, Le reiterated the company’s confidence in Bitcoin as a scarce, non-sovereign asset with widespread global appeal. He highlighted that people worldwide have shown strong interest in Bitcoin. 

Strategy has continued to buy more Bitcoin despite market volatility and uncertainty. As at November 17, Strategy owns 649,870 BTC, valued at around $61.7 billion at current market prices. 

Strategy Introduces BTC Credit Dashboard

In response to recent declines in Bitcoin and a sell-off in its digital asset treasury stocks, Strategy introduced a new dashboard called BTC Credit. This move is to reassure investors about the strength of its holdings. 

The company maintained that it has sufficient coverage for dividend payments for many years, even if the price of Bitcoin crashes. Le emphasized that Strategy’s debt obligations would remain manageable if the price of Bitcoin fell to its average purchase level of about $74,000. 

Le pointed out that the company would still be serviceable even at $25,000 per Bitcoin. At the time of writing, Bitcoin is trading at $91,481, up by 0.51% in the last 24 hours, according to CoinMarketCap data.