Strategy finished the week with both harsh criticism from industry insiders and Bitcoin’s weak outlook around $60,000. While Bitcoin was hovering around $60,102 before the weekly close, the company’s co-founder, Michael Saylor, shared the reserve chart on his X account and said, “We will need more charts.” Some investors considered this post as a new buying signal.
There was a big difference in reserves
The company’s financial statement revealed a more cautious picture. Strategy holds 847,363 BTC. The average purchase cost of these assets is $75,653 per coin. Since Bitcoin was traded around $60,000, the company’s loss on paper exceeded $13 billion.
This picture was also reflected in Strategy’s market value. While the market value of the company decreased to $ 29 billion, this figure remained approximately 43 percent below the value of Bitcoin assets on the balance sheet. The resulting difference has complicated the cycle of capital increases and new Bitcoin purchases that the company has implemented to date.
Mini dictionary: mNAV is the multiplier that shows the ratio of a company’s market value to its net asset value. This metric is used to understand whether the stock is trading at a premium or discount to holdings, especially in companies that carry large amounts of crypto assets on their balance sheet.
Threshold for new share issuance not exceeded
According to company rules, Strategy’s issuance of new shares for the purchase of cryptocurrency is contingent on the market value exceeding the value of Bitcoin in reserve by at least 22 percent. In other words, the mNAV ratio should increase to 1.22. Currently, this rate has dropped to 0.99.
Therefore, the issuance of new shares does not seem economically attractive. It is stated that such a step would dilute the shares of existing partners and the company management may have to stop purchases due to the framework it has determined.
Cash pressure and Wall Street criticism came to the fore
The company’s free cash position is also under pressure. Among preferred shares, STRC fell to $74.57, about a quarter below par value. The remaining $1.4 billion in cash reserves is calculated to provide approximately 14 months of space for dividend payments against an annual liability of $1.2 billion.
Grayscale Research President Zach Pandl argued that Strategy should sell at least $3 billion worth of Bitcoin to cover its short-term debts. Ripple CEO Brad Garlinghouse also stated that the structure established with debt harms the market and makes Bitcoin overly dependent on the balance sheet of a single company.
Grayscale stands out as a major asset manager known for its digital asset-focused investment products. Ripple is a technology company that develops cross-border payment solutions, and Brad Garlinghouse, as the CEO of the company, frequently expresses his views on regulatory discussions in the crypto market.
Critical levels are monitored
Michael Saylor, on the other hand, argues that the company is not at risk of liquidation as long as the Bitcoin price remains above $ 8,000. However, the technical outlook indicates that recouping costs may not be easy in the short term. The main areas and resistance levels where trading intensity stands out are around $67,098 and $75,682.
This outlook highlights the need for a more significant recovery in Bitcoin so that Strategy can return to strong buying again. Unless the market approaches the $75,000 region, the pressure on the company’s balance sheet and debt discussions are expected to remain on the agenda.
