Bitwise Chief Investment Officer Matt Hougan said Strategy’s role in the Bitcoin market has changed after the company adopted a new capital framework. In his view, Strategy is no longer simply a steady Bitcoin accumulator. It now has the ability to sell Bitcoin when necessary to help meet STRC dividend obligations.
Hougan made the comments while addressing recent volatility in STRC and weakness in MSTR. He said the move should be read in the context of a broader deleveraging phase across crypto markets, not as an isolated company event. He described the price action as behavior often seen near the end of a cycle, comparing it with the unwind of the GBTC premium in the previous Bitcoin cycle.
New framework changes how Strategy can manage capital
According to Hougan, Strategy’s latest structure allows the company to periodically sell Bitcoin to fund dividend payments tied to STRC. The company has also said it may repurchase STRC in the open market.
Before this shift, Strategy had raised STRC’s dividend yield in an effort to keep the preferred shares trading close to their $100 par value. Even so, STRC later fell to about $75 as investors questioned whether future dividend payments would hold up. Hougan said pushing the yield even higher would have required much larger changes and could have triggered added concern about how those dividends would be funded.
Instead, Strategy lifted the official yield to 12% and stopped targeting a fixed $100 share price. After that announcement, both STRC and MSTR recovered.
Balance sheet details shape the liquidation debate
Hougan said Strategy holds about $49.6 billion in Bitcoin and $2.6 billion in cash, against roughly $6.8 billion in debt. He also said the company carries around $15.5 billion in preferred equity.
Based on that position, Hougan argued that liquidation concerns do not align with Strategy’s current financial picture. He added that the company could suspend preferred dividend payments if needed. That, in his assessment, gives Strategy more flexibility than critics are implying.
At the same time, he said the framework should not be read as a signal of large-scale Bitcoin selling. The bigger change, he argued, is that Strategy may now act as a more flexible market participant rather than a one-way buyer.
Hougan sees ongoing deleveraging as the market nears a bottom
On the recent drop in MSTR and sharp swings in STRC, Hougan said leveraged positions tied to financial engineering still need to exit before conditions settle. Excess leverage, he said, continues to leave the crypto market.
He pointed to several indicators investors may want to watch: MSTR’s discount to net asset value, leverage funding rates, and the Crypto Fear and Greed Index. In Hougan’s view, those measures may help show when market conditions begin to change, as the current deleveraging process moves closer to a bottom.