Strategy, a business intelligence company founded by Michael Saylorhas released new data detailing how its Bitcoin (BTC) position is holding up under current market conditions. This revelation raises the question of whether the company could ever be forced to sell its $54.59 billion in Bitcoin holdings. Its latest internal forecasts, shared publicly, highlight the company’s expectations for long-term sustainability while prompting scrutiny of its historical aggressive accumulation strategy.
The strategy confirms that BTC reserves cover dividends for decades
The strategy team stated on X this Thursday to with Bitcoin is trading below $85,000the company has more than enough coverage to maintain its dividend obligations for 71 years even if the price remains unchanged. Additionally, if Bitcoin’s price grows by more than 1.41% annually, that growth alone would completely neutralize the company’s dividends without requiring additional funds.
Strategy shared its internal credit dashboard, which tracks details such as debt maturities, maturities, interest rate exposure and Bitcoin risk. The report shows a total debt of $8,214 and a matching cumulative national value. Most of this comes from the company’s Bitcoin-linked preferred instruments, including various tranches in the STR series, totaling $7,779 and with a combined face value of $15,993.
Durations of these instruments range from under 2 years to nearly 10, incl BTC risk concentrated in the low single digits. In total, the combined debt and preferred structure is $15,993. The company’s model also assumes a Bitcoin price of $87,300, a volatility of 45% and an expected annual return of 30%.
According to Strategy, these figures indicate that the company has plenty of financial flexibility. The company has shown that its dividend security is not dependent on aggressive Bitcoin price growth. Although its balance sheet is tied to BTC market developmentStrategy’s internal credit analysis suggests it can withstand long periods of sideways price action without liquidating its core holdings.
Saylor faces criticism for persistent Bitcoin purchases
In a separate update, Strategy marked its actions in 2022 crypto winterwhich was marked by a comprehensive market collapse. When the price of Bitcoin fell to $16,000, roughly 50% of the Strategy’s then-average cost base of $30,000, the company increased its position rather than withdrawing.
This reminder rekindled longstanding criticism from market participants who argue that the firm’s approach relies too heavily on constant averaging. CEO of SwanDesk, Jacob King, criticized Saylor, claims the Strategy founder has demonstrated no real investment acumen.
King pointed out that since Saylor’s initial BTC purchase of around $11,000, the cryptocurrency has increased roughly 1,000%. In contrast, Strategy has only generated a return of 22% over five years, which equates to around 4.4% per annum. King described this performance as “terrible”, attributing it to the company’s seemingly flawed strategy of constantly buying Bitcoin at higher prices.
SwanDesk’s CEO also highlighted Saylor’s history in the tech sector, noting that he had wiped out nearly 99% of his net worth during the dot-com era by chasing underperforming tech stocks and reworking the company’s finances according to the review by the US SEC.
Featured image from Getty Images, chart from TradingView
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