CryptoQuant head of research Julio Moreno said Strategy’s newly introduced digital credit capital framework has largely addressed the company’s short-term liquidity pressure, but the firm still lacks a disciplined structure for buying and selling Bitcoin across market cycles. According to CryptoQuant, after the framework was announced, Strategy sold 3,588 BTC, worth about $216 million, to replenish its U.S. dollar reserves. It also raised $466.7 million by selling MSTR shares. As a result, the company’s dollar reserves increased from $1.44 billion to about $3 billion, while preferred dividend coverage improved from roughly 14 months to 29 months. Strategy’s Bitcoin holdings remain unchanged at 843,775 BTC. Even so, CryptoQuant said two key issues remain unresolved: when the company should resume buying Bitcoin, and how it should sell part of its holdings in the next bull cycle. The current framework defines funding tools, but does not set out a valuation-based accumulation model or a long-term capital management plan for trimming exposure near cycle highs or hedging risk.
On July 18, CryptoQuant head of research Julio Moreno said Strategy’s latest digital credit capital framework has largely solved the company’s short-term liquidity problem, but the firm still needs a more disciplined mechanism for buying and selling Bitcoin.
According to CryptoQuant, Strategy has sold 3,588 BTC, worth about $216 million, to rebuild its U.S. dollar reserves since the new framework was introduced. The company also raised $466.7 million through sales of MSTR shares. That lifted its dollar reserves from $1.44 billion to about $3 billion, while preferred dividend coverage improved from roughly 14 months to 29 months.
As of now, Strategy’s Bitcoin holdings remain unchanged at 843,775 BTC.
Two issues remain unresolved
CryptoQuant said Strategy still has not answered two key questions.
The first is when it should resume buying Bitcoin. The current framework sets rules for financing, but it does not establish a systematic accumulation model based on valuation. In CryptoQuant’s view, that leaves open the possibility of repeated buying at elevated prices.
The second is how Strategy should sell part of its Bitcoin holdings in the next bull market. The framework allows BTC sales to replenish reserves, pay dividends and fund share buybacks, but it does not yet include a long-term capital management strategy for reducing exposure in stages near cycle highs or hedging risk.
CryptoQuant said a buy-and-sell discipline that spans both bull and bear markets will be an important part of Strategy’s active capital management system.
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