Strategy Pauses Bitcoin Buys, Saylor Obliterates The FUD

• Strategy paused its Bitcoin acquisitions over the past week in favor of buying bonds.
• Executive Chair Michael Saylor and the company’s metrics indicate that Strategy has sufficient cash and other assets to pay dividends to investors, even amid tough crypto market headwinds.

Strategy (formerly MicroStrategy), a Bitcoin (BTC) development company and software enterprise solution provider, paused its Bitcoin purchases over the past week. Michael Saylor, the company’s Executive Chair, confirmed the move on Sunday.

MSTR Remains at a Premium

Despite the temporary break in its Bitcoin buying spree, Strategy remains the largest institutional holder of BTC. To date, the business holds 843,738 BTC, accounting for 4.21% of the coin’s 20.03 million circulating supply.

At Bitcoin’s fluctuation between a $76,019.89 low and $77,602.63 high in the last 24 hours, Strategy’s BTC portfolio stands at around $64.14 billion to $65.47 billion. However, it’s again dangerously close to its total Bitcoin purchase of $63.87 billion, at a dollar-cost average of $75,700 per BTC.

Along the way, Strategy maintains a Multiple-to-Net Asset Value (mNAV) of 1.19. The figures indicate that its shares are still trading at a premium relative to the spot price of its treasury’s BTC holdings.

Key Reason for Skipping Bitcoin Purchases

According to Saylor, Strategy skipped its Bitcoin acquisitions in favor of buying bonds. He didn’t elaborate on the details, but the company likely bought back bonds to offload its debt obligations and optimize its balance sheet.

By retiring some of its debt at a discount, especially during a period of market consolidation, Strategy has effectively executed a textbook liability management play. The reduction in leverage minimizes its potential financial friction ahead of future BTC accumulations.

Saylor Demolishes the Strategy and Bitcoin FUD

Time and again, critics are challenging Strategy’s Bitcoin playbook. They questioned Saylor and the company about what would happen if their BTC holdings stopped appreciating.

Previously, Saylor highlighted that Strategy is more than capable of paying its dividends. He stated that their BTC reserves need to increase by only 2.3% annually for the business to sustain its financial obligations to investors.

At this rate, Strategy pays $1.712 billion in annual dividends. With its cash reserves of $2.25 billion, it can cover up to 15.8 months of dividends under market headwinds.

It adds up to Strategy’s 38.1 years of dividend coverage if it decides to use its BTC holdings to pay investors. Meanwhile, the company has over $8.25 billion in debt.

For Saylor, that should give them enough time to recalibrate their strategy if Bitcoin prices dramatically go south.

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