Strategy feels 'very secure' until bitcoin reaches $8,000-$10,000, says CEO

Strategy (MSTR), the largest public holder of bitcoin BTC $ 65,260.74 , won’t panic unless BTC sinks to the $8,000-$10,000 range, its CEO has said.

Phong Le identified that range as when the company “would have to consider some of the risk associated with our debt,” in an interview with Bloomberg TV on Tuesday .

Such a drop would represent a drop of around 85% based on bitcoin’s current price of around $64,500 as of writing.

“Until that point in time, we feel very secure about the balance sheet,” Le said. “What we need to do is build a capital structure that can withstand bear markets and of course benefit from bull cycles.”

Strategy’s preferred stock STRC, which is designed to give it the cash flow to fund its bitcoin buying in return for a regular dividend — currently a 13% annual yield, has been under pressure in recent months. The stock is designed to maintain a $100 par, which it lost in April and falling below $75 in late June .

When STRC falls below $100, it restricts Strategy’s ability to issue new shares and then use the cash to buy bitcoin.

Le highlighted increasing the U.S.-dollar reserve as an important lever in STRC’s recovery back to around $90.

“We’ve learned over the last couple of months that having that liquid access to U.S.-dollar capital is quite important,” he said. “So we’ll continue to build that.”

MSTR closed nearly 6% at $97.58 on Tuesday, but some 36% lower year-to-date and 78% lower than 12 months ago.

For many observers, the key metric is MSTR’s multiple to net asset value (mNAV), which compares the shares’ market cap to the value of its bitcoin holdings. The metric fell below 1 at the end of June and now sits at 1.02 meaning the shares offer only a slight premium to its BTC coffers.

“As long as MSTR is priced at greater than the net-asset value of our bitcoin, it means that our shareholders are giving us credit for the performance above bitcoin,” Le said.

CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.

Disclosure & Polices : CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies . CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of Bullish (NYSE:BLSH), an institutionally focused global digital asset platform that provides market infrastructure and information services. Bullish owns and invests in digital asset businesses and digital assets and CoinDesk employees, including journalists, may receive Bullish equity-based compensation.

新闻图片