The company may start lending out Bitcoin and just bought 130 more using shares.
Strategy is sitting on nearly $59 billion worth of Bitcoin, but that mountain of crypto might not stay untouched for long.
Speaking on Bloomberg TV this week, Phong Le, the company’s Chief Executive Officer, said the company could be forced to sell part of its stash if the market keeps dragging the stock price below the value of its Bitcoin.
“We really don’t want to have to utilize that Bitcoin at times when our equity value goes below that of the Bitcoin holdings,” Phong said on Tuesday. “Our objective is to pay the dividend into perpetuity.”
The warning from Phong followed a move by the company to raise $1.4 billion in cash reserves, funded through share sales. That money buys 21 months of breathing room, possibly up to two years, to continue paying out dividends and interest without dipping into the crypto holdings.
The cash cushion is there to calm fears that the company might have to start selling off Bitcoin to cover its growing financial commitments.
Strategy eyes token lending, considers last-resort sale
But if things get worse, Phong didn’t deny that a Bitcoin sale is absolutely on the table. In a podcast last week, he made that clear, saying there’s a “mathematical side” and an “emotional side” to the decision, and that logic tends to win out. “There’s the mathematical side of me that says that would be absolutely the right thing to do, and there’s the emotional side of me, the market side of me, that says we don’t really want to be the company that’s selling Bitcoin. Generally speaking, for me, the mathematical side wins.”
There’s another option on the table too. Strategy is now looking into lending out its Bitcoin, which is a major change from its original “buy and hold” approach. “When they [traditional finance firms] enter that space, and we have different counterparty, lending Bitcoin is something we would consider and I think we would be enthusiastic about,” Phong said.
As you should know, Strategy was a software company until 2020, when Michael Saylor, the co-founder and current Chairman, made the call to start converting corporate cash into crypto, justified by concerns over inflation.
Wall Street barely understood it at first, but investors chasing Bitcoin exposure quickly bought in. The stock took off, rallying more than 3,500% at its peak and beating every major index.
But now that trade is unraveling. Strategy’s stock has dropped roughly 65% from its all-time high in November 2024, as the Trump-fueled post-election crypto euphoria faded.
At the same time, more companies have jumped on the same crypto treasury model that Saylor pioneered, erasing the uniqueness that once gave Strategy its edge.
The mNAV, which tracks how Strategy’s value compares to its Bitcoin holdings, is now 1.17, dangerously close to flipping negative. That scenario could easily trigger sales of Bitcoin, just to avoid being valued like a zombie stock.
Earnings forecast swings between billions in losses or profits
In October, Strategy told investors it expected Bitcoin to hit $150,000 by the end of 2025. That’s now been revised down to $85,000 to $110,000.
Depending on where Bitcoin lands, operating income could end up being anywhere from a $7 billion loss to a $9.5 billion profit. The company says the wild swing is due to accounting rules that require it to value Bitcoin at market price at the end of each quarter. Net income could range from a $5.5 billion loss to a $6.3 billion gain, while diluted earnings per share may fall between a $17 per-share loss and a $19 profit.
Investors are already reacting. Strategy’s stock jumped 8% on Tuesday, the same day Bitcoin rose 6.5% to around $92,000. That bounce followed a new purchase by the company; 130 Bitcoin for $11.7 million, bought using common shares. The buy came after a full week of no activity in its wallet.
Still, the company is now dealing with the side effects of being a leveraged Bitcoin proxy. Index providers are watching. Analysts at JPMorgan Chase said Strategy could be dropped from major equity indexes, which would mean billions in outflows from passive funds.
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