Quick Read
- Strategy (formerly MicroStrategy) established a $1.44 billion USD reserve to secure dividends amid a sharp Bitcoin decline.
- The reserve covers at least 21 months of payments, with plans to extend to 24 months, aiming to prevent forced Bitcoin sales.
- CEO Phong Le says BTC sales are unlikely unless the market value to Bitcoin (mNAV) ratio drops below 1.0.
- Michael Saylor now acknowledges selling BTC could be an option if mNAV falls, marking a shift from his previous ‘never sell’ stance.
- Despite criticism from figures like Peter Schiff, most prediction markets see only a slim chance of a BTC sale before year-end.
Strategy’s Bold Move: $1.44 Billion Reserve to Calm the Bitcoin Storm
When the world’s largest corporate Bitcoin holder moves, markets listen—and sometimes, they shudder. On Monday, Strategy (formerly MicroStrategy), the Tysons Corner-based digital asset powerhouse led by Michael Saylor, announced the creation of a $1.44 billion U.S. dollar reserve. The timing was no accident. Bitcoin had just endured its steepest monthly decline since 2021, erasing over 30% from October’s record highs and sending investor nerves into overdrive.
This new reserve isn’t just a financial footnote. It’s a strategic buffer designed to guarantee dividend and interest payments for at least 21 months, with ambitions to stretch that security to two full years. The funds were raised through recent sales of the company’s Class A common stock, a move aimed squarely at reassuring shareholders that Strategy won’t have to liquidate its roughly 650,000 BTC—currently valued around $56 billion—even if Bitcoin’s bear market persists.
Why the Reserve, and Why Now?
CEO Phong Le, whose comments last week ignited fears of a possible BTC sale, was clear: the reserve dramatically reduces the likelihood that Strategy would need to touch its Bitcoin trove. But beneath this reassurance, there’s a frank acknowledgment of risk. If the market value to Bitcoin (mNAV) ratio drops below 1.0—meaning the company’s value falls beneath its crypto holdings—Strategy could be forced to sell. At the time of the announcement, the mNAV hovered at 1.13, already close enough to stoke concern.
“Bitcoin is volatile, and what we want to do is deliver a digital product to volatility-adverse investors, and we want to assure them that Bitcoin’s volatility is never going to impact their dividends,” Saylor said during the update call, as cited by Decrypt. The reserve, in his words, is the next phase in Strategy’s evolution, reinforcing its position as a leading digital asset treasury and providing a measure of calm in a stormy crypto landscape.
Dividend Security vs. Bitcoin Purity: The Changing Narrative
Michael Saylor has long been known for his “never sell your Bitcoin” mantra. But as Strategy pivots from its roots as a business-intelligence firm into a digital-asset vault, the narrative has shifted. The company’s business model depends on paying dividends, which are funded primarily by issuing equity. That’s only sustainable as long as mNAV stays above 1.0. If it slips, selling Bitcoin—or derivatives—becomes a real possibility.
Saylor addressed this head-on: “Not only can the company sell Bitcoin in order to pay the dividends, the company can actually sell highly appreciated Bitcoin, pay the dividends, and then continuously increase its Bitcoin holdings in Bitcoin every quarter, forever.” It’s a subtle but important shift. The reserve is meant to ensure that even in times of market stress, Strategy can weather at least two years of dividend payments without forced sales or risky equity moves.
Yet, not everyone is convinced. Peter Schiff, a long-time Bitcoin critic, took to social media to declare Strategy’s model “unsustainable” and liken it to a Ponzi-like structure. He argued that without meaningful operating income, the company is forced to issue more preferred shares at high interest rates or ultimately sell Bitcoin—painting Saylor as “the biggest con man on Wall Street.” Schiff’s comments, reported by Benzinga, underscore the skepticism that still surrounds corporate Bitcoin strategies.
Market Reactions: Stocks, Sentiment, and the Road Ahead
The impact of Strategy’s announcement was immediate. Shares of MSTR dropped more than 6% in pre-market trading, then pared losses after the reserve news broke. The stock currently sits near $165, down 70% from last year’s highs, reflecting the brutal volatility of both Bitcoin and the company’s fortunes. Bitcoin itself fell sharply to around $86,469, extending a two-month drawdown and sparking worries across both retail and institutional investors.
Strategy’s updated 2025 guidance acknowledges a new reality: the earlier forecast of Bitcoin hitting $150,000 by year’s end is off the table. The company now expects a year-end BTC price between $85,000 and $110,000, with operating income swinging wildly between a $7 billion loss and a $9.5 billion profit, depending on the quarter’s mark-to-market accounting.
Despite the turbulence, some analysts remain optimistic. Brokers like Benchmark assert that Strategy is structurally sound, with Bitcoin unlikely to reach the distress threshold of $12,700 that would trigger solvency risks. On the prediction market Myriad, only 6% of users believe Strategy will sell Bitcoin before the end of the year, signaling a cautious but persistent faith in the company’s resilience.
The Strategy Model: Sustainability or Stress?
Strategy’s transformation—from software solutions provider to digital-asset treasury—has been nothing short of dramatic. The company now holds about 3.1% of the global Bitcoin supply, acquiring 130 BTC for $11.7 million last week alone. Yet its software division generates little free cash flow, and Bitcoin itself yields no income. This means Strategy’s ability to pay dividends hinges on capital raises or, as critics warn, eventual asset sales.
Schiff’s critique zeroes in on this tension: is the Strategy model truly sustainable, or does it depend on ever-rising equity and Bitcoin prices? Mainstream financial media, he claims, have been too quick to embrace Saylor’s vision without challenging the underlying risks. As Bitcoin’s price fluctuates and the company’s reserve is put to the test, these questions will only grow louder.
Ultimately, the establishment of the $1.44 billion reserve marks a turning point—not just for Strategy, but for corporate Bitcoin stewardship as a whole. Whether this buffer can insulate the company from future shocks, or simply delay the day of reckoning, remains to be seen.
Strategy’s $1.44 billion reserve is both a shield and a signal: it buys time and confidence, but it does not erase the underlying risks of relying on volatile assets for corporate stability. As Saylor’s team walks a financial tightrope, investors will be watching closely for signs that the company’s bold bet on Bitcoin can truly weather the storms ahead—or if, when push comes to shove, even the world’s biggest holder must break its own cardinal rule.