Strategy will start buying Bitcoin again once its preferred shares known as Stretch, or STRC, recover to their $100 par value, CEO Phong Le said, outlining a financing approach built to withstand the current crypto downturn.
Speaking to Bloomberg TV on Tuesday, Le said the immediate goal is to get STRC back to par. "When Stretch gets back to par, we'll issue more. We'll buy Bitcoin. We may continue to beef up our U.S. dollar reserve," he said, while also saying he is "unsure" how long that process will take.
Le said additional issuance of the preferred stock is a major part of Strategy’s capital plan because it is "very accretive" to Bitcoin per share, which in turn benefits shareholders.
Bitcoin purchases remain on hold as cash reserves rise
Strategy has not bought Bitcoin since late June. Instead, the firm has spent the past several weeks building cash, raising $467 million through a common-stock sale and lifting its reserve to $3 billion. Le said that amount is enough to cover two years of dividend payments.
He described the move as part of a broader transition for the company, saying Strategy is evolving "from being a Bitcoin treasury company to a full digital capital platform."
Why getting STRC back to par matters
STRC has traded below its $100 par value since mid-May and was changing hands around $89 on Wednesday. That matters because issuing new preferred shares becomes unattractive when the stock trades below par, limiting Strategy’s ability to raise capital through the instrument it wants to use.
Le said the main lever is building up a U.S. dollar reserve. He said the company has learned over the last couple of months that having liquid access to U.S. dollar capital for one, two, or three years is important. As that reserve increased in recent weeks, he said, STRC climbed from a low in the $75 range to close to $90.
"We're not going anywhere"
Le pushed back on the idea that Strategy is stepping away from its role as Bitcoin’s most prominent corporate buyer. "We're not going anywhere," he said. "Anybody that's worried about Strategy shouldn't be."
He pointed to the company’s position as the largest identified holder, with more than 840,000 BTC on its balance sheet. That amounts to about 4% of the 21 million Bitcoin that will ever exist. "Bitcoin's a lot bigger than us," Le added, noting that the asset trades $30 billion to $40 billion a day and that the firm’s recent $216 million in sales "did not move the market."
Capital framework changes and market concerns
Those sales began last month, when co-founder Michael Saylor started trimming the firm’s $54 billion Bitcoin stack. The move had raised questions about the durability of the debt-and-equity flywheel he put in place in 2020.
Standard Chartered analysts recently downplayed the significance of those actions as "mostly noise" after Strategy introduced a capital framework two weeks ago that gave management more room to sell Bitcoin, buy back securities, and protect liquidity.
Le also dismissed a Bloomberg report that distressed funds were in talks to swap their STRC holdings, saying the company has not had "any material conversations" on the matter.
Debt risk, in Le’s view, starts much lower
Asked about a worst-case scenario, Le pointed to price levels far below Bitcoin’s roughly $64,700 trading price at the time of the interview. "When Bitcoin gets down closer to $8,000 to $10,000 is when we're going to have to consider some of the risk associated with our debt," he said.
"Until that point in time, we feel very secure about the balance sheet," he added. Le argued that the current slump is familiar territory for the company: "We've been through this in 2022. We're going through it in 2026, and I'm pretty excited about the next bull market of Bitcoin."
MSTR and BTC remain under pressure
For now, Strategy’s Bitcoin buying remains paused. Over the past year, MSTR stock has fallen more than 77%, while Bitcoin has dropped 45% over the same period. The cryptocurrency was trading at around half of the all-time high it set in October, leaving the preferred-share funding engine that supports Strategy’s purchases below the level Le says it needs to restart.
On prediction market Myriad, users currently assign just a 13% chance that Strategy will hold more than 1 million BTC before 2027. With less than half the year left, the company would need to buy more than 150,000 BTC to reach that milestone. Myriad is owned by Dastan, Decrypt’s parent company.