Strategy resumed its bitcoin purchases this week after chairman Michael Saylor clarified remarks that had rattled markets, saying the company could sell some BTC to cover dividend obligations on its preferred stock.
Saylor addressed the controversy in a weekend podcast:
“I’m very famous for saying ‘never sell your Bitcoin.’ That’s why the internet went crazy when we said we might sell it. But if I was being more precise: never be a net seller of Bitcoin. It just wouldn’t have been so viral.”
The purchase
Hours after the podcast aired, Strategy announced it had bought 535 BTC for $43 million at an average price of $80,340 per coin.
The purchase followed a week-long pause in buying and brought the firm’s total holdings to 818,869 BTC, worth roughly $61.9 billion.
The original controversy stemmed from Strategy’s earnings call, where the company disclosed it could pause sales of its MSTR common stock and instead cover STRC dividend obligations through bitcoin sales.
STRC is Strategy’s perpetual preferred stock paying a quarterly cash dividend, with an effective annual yield of around 11.5%.
Saylor’s math
Strategy sold $3.2 billion in STRC in April alone, deploying those proceeds into bitcoin purchases.
The quarterly dividend on that issuance runs approximately $80 to $90 million, implying a buy-to-sell ratio of roughly 30-to-1 in any month where the company must raise cash for dividends.
Saylor put the firm’s break-even issuance rate at 2.3% of holdings annually, with current issuance running between 15% and 20%.
JPMorgan analysts estimate Strategy’s bitcoin purchases could total $30 billion this year at the current pace.
Market reaction
Gold advocate Peter Schiff argued Saylor had “admitted MSTR would sell Bitcoin if needed,” calling the arrangement a Ponzi scheme.
Saylor dismissed the criticism, saying Schiff “is not really a lover of anything in this space.”
Experts speaking to Decrypt downplayed the likelihood of a market shock from any potential Strategy sale, with derivatives trader Georgii Verbitskii noting that unless the scale of selling is very large, it would not structurally change the market.
