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In a volatile cryptocurrency market, Strategy, one of the largest holders of Bitcoin, raised $747.8 million through the sale of shares while suspending its BTC purchases. This decision underscores the desire to secure its finances in light of market volatility. It is a strong signal for the cryptocurrency ecosystem, which could influence other companies to adopt similar strategies.
In short
Strategy recently sold $747.8 million in shares and paused its Bitcoin purchases.
The company sold 4.5 million shares to increase its dollar reserves, aiming to secure dividend payments and cover its debts.
Strategy has decided to suspend its Bitcoin acquisitions, a measure taken in response to falling cryptocurrency prices and market uncertainty.
This decision could signal a change in strategy for cryptocurrency companies, with possible consequences for reserve management in an uncertain environment.
Sale of shares and increase of dollar reserves
Last week, Strategy made an important strategic decision by selling 4.535 million Class A shares, as the company narrowly escaped being cut from the top ranking of the Nasdaq 100.
This transaction generated net proceeds of $747.8 million and allowed the company to strengthen its dollar reserves.
These are the key data we must remember:
The amount generated: $747.8 million from the sale of 4.535 million Class A shares of Strategy (MSTR);
The goal of the sale: to strengthen U.S. dollar reserves to support dividend payments and cover part of the company’s debts;
Current dollar reserves: after this transaction, the company's cash reserves now amount to $2.19 billion;
Bitcoin reserves: Holdings at this level remain at 671,268 BTC;
The dollar reserve strategy: the company's stated goal is to maintain a sufficient reserve to fund 12 months of dividends, with the ambition to extend this reserve to 24 months;
No sale of preferred shares: The strategy opted not to sell preferred shares during this period.
This operation occurs at a time when the cryptocurrency market is going through a period of turbulence, affecting the valuation of the company's cryptocurrency investments. With this measure, Strategy seeks to stabilize its financial position while continuing to play an important role in the Bitcoin ecosystem.
The slowdown in Bitcoin purchases: a strategic adjustment in the face of market volatility
The slowdown in Bitcoin purchases marks a turning point for Strategy, which has so far supported an aggressive cash Bitcoin strategy, accumulating thousands of BTC in the hope of capitalizing on a rise in its value.
However, this strategy seems to be on hold in the current bearish cryptocurrency market. Michael Saylor and his team have clearly stated that the company did not make new Bitcoin purchases between December 15 and 21.
Strategy's most recent purchase, made on December 15, involved 10.645 BTC, acquired for $980.3 million at an average price of $92,098 per bitcoin. However, this purchase is part of a series of decisions that demonstrate a more moderate adoption of cryptocurrencies as a reserve asset, unlike the period when the company made massive purchases at any price.
The halt in purchases could be seen as a prudent response to an uncertain market, where falling prices and the slow recovery of the cryptocurrency market make this strategy less attractive in the short term.
As the price of Bitcoin remains under pressure, Strategy's decision to adjust its reserves could indicate a change of direction for other companies in the sector. While this pause in BTC purchases seems necessary given the volatility, it raises questions about the long-term viability of Bitcoin cash management strategies in times of crisis.
