Strategy CEO Phong Le highlighted scenarios in which the company would offload some of its Bitcoin holdings. This explanation comes after the head of the treasury company, Michael Saylor, hinted at the possibility of strategically selling portions of Bitcoin over the past week.
Why the strategy could dump some of its Bitcoin holdings
In an interview with CNBC, Lu said Analyzed The terms under which Strategy can sell some of its Bitcoin holdings. While the move would be in stark contrast to the company’s “never sell” strategy, the CEO believes a change in philosophy may be necessary under current market conditions.
The CEO stated that the company could sell some of its Bitcoin to fund the payment of an 11.5% dividend yield on its perpetual preferred stock (STRC). Lu said the strategy would sell a portion of its bitcoin to cover the dividend if shareholder value increased (defined as an increase in the “price of bitcoin per share”).
Source: @phongle on X
Lou said in the interview:
I believe in mathematics more than ideology, and at the point where selling bitcoin versus selling stock to pay a dividend is better for our bitcoin per share, and for our common shareholders, we will do so.
Strategy’s CEO also explained that BTC sales accrete to shareholder value when a company’s book value is less than its market value, or vice versa. Le also mentioned the option to sell Bitcoin to capture deferred tax gains (and losses, as in its current state).
As of press time, the strategy is The largest Bitcoin holderwith about 818,334 Bitcoin (about 4% of the cryptocurrency’s supply) on its books. With annual dividend obligations of more than $1.5 billion, Lu suggested his $65 billion Bitcoin holdings are more than enough to cover these payments.
How can strategy sales affect the price of Bitcoin?
As expected, the idea that the largest Bitcoin holder would do so Selling her property To fulfill obligations are not well received. However, Strategy’s CEO believes the leading cryptocurrency is liquid enough to withstand any major sales by his company.
As Lee put it, selling on the open market to fund a $1.5 billion dividend is a drop in the ocean of Bitcoin’s daily trading volume of more than $60 billion. Although he acknowledges that the strategy is an important player in the market, he does not believe that his company’s activity has any significant impact on the price (considering how liquid the market is).
As of this writing, BTC is worth around $80,840, reflecting a 0.5% price increase over the past 24 hours.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image by Michael Saylor/X, chart from TradingView
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