Bitcoin price fluctuates around $70 thousand. The support level, which was broken yesterday and was about to be broken, is resistance today. Yesterday’s frightening levels give hope today. We will focus on one of the most important details, of course Strategy. Many experts say that if Strategy avoids massive BTC sales, we will not return to the old bear markets. So is Strategy solid?
Strategy and Bitcoin
Strategy is the world’s largest institutional Bitcoin reserve company and has hundreds of thousands of BTC reserves. Moreover, these assets are not inert supply like in the wallets of Nakamoto and others, but assets collected from the markets. Moreover, Strategy evaluates every decline as accumulation.
Strategy, which is constantly borrowing and constantly making new purchases, never considers selling BTC. BTC They bought when it was struggling at $20,000 and when rockets were firing at six-digit levels. They have escaped the MSCI FUD for now and maintained their positions to buy more with MNAV above 1.
Today the company has 713,502 BTC. MNAV has increased to 1.17 and BTC has increased by 7 percent MSTR shares continues the day with a 24 percent gain. The company’s total debt is at $8.2 billion, and they hold over $50 billion worth of BTC on behalf of MSTR holding investors motivated by the proxy BTC ETF. In other words, Strategy is a company that holds a significant portion of a smaller portion of the 21 million BTC supply in circulation, is not keen on selling Bitcoin, and is “extremely in favor of bulls” who want to accumulate constantly.
Is the Strategy Solid?
In the first part “What is Strategy?why is it important for BTC?” We also looked for an answer to the question. But at last year’s shareholder meeting, the company’s president mentioned that they could sell BTC if necessary. So is Strategy really solid? So, when we wake up one morning, can we see 713,502 BTC on the sell side? Can the company be forced to do this?
TD Cowen analysts give the answer to this question. TD Cowen analysts Lance Vitanza and Jonnathan Navarrete say Strategy has “further solidified its position” as the leading institutional bitcoin treasury and is even well-positioned for a recovery.
“Bitcoin price It should come as no surprise that Strategy’s common shares outperformed bitcoin when the price was rising and performed worse than bitcoin when the price of bitcoin was falling.
“This is actually intentional.” – TD Cowen
Because the investment model here is designed so that MSTR shares are roughly 1.5 times more volatile than BTC. Of course, in abnormal weather, there can be gains of over 20% versus 6% like today.
“This relationship has been confirmed over longer historical periods as well as over the past 30 days, and we expect this relationship to continue as long as Strategy’s treasury operations continue.” – TD Cowen
Analysts argue that Strategy is solid, saying it has the power to buy even during much sharper BTC declines. TD Cowen maintained his price target on Strategy at $440 and reiterated his buy rating.
Strategy announced billions of dollars in losses in its fourth-quarter earnings report this week. But CEO Phong Le says Bitcoin must fall to around $8,000 for Strategy to face serious difficulties paying off its convertible debt. So will it go bankrupt immediately? No Phong Le, if BTC spends 5-6 years here, Strategy will not be able to pay its debts. That is, until the day cryptocurrencies probably disappear. Strategy It means it will stay solid. Companies like Strategy take into account the risk of being sued when adding such assertive words to their earnings reports or announcements, so we can think that they can make these assertive words because they can explain the mathematics here.
