Bitcoin briefly reclaimed $65,000 on Monday — but could the worst of the selloff really be behind us?
Right now the answer to that question rests solely on Strategy's shoulders. The largest public holder of Bitcoin got back to buying this week — but importantly also raised more than $335 million by issuing more common stock. Now, the question becomes: Will it be enough?
It's an almost impossible question to answer, especially as the overall market tests whether the Iran War ceasefire will hold. For now, here's what we learned in speaking with Strategy's CEO — and why things might be turning for the better. Let's dig in:
By now, we don't need to re-hash the history of Strategy getting to this point, but after drawing down on its cash reserves to retire more than $1 billion in convertible debt, the market was waiting to see what Strategy would do.
The answer came with the latest 8-K this morning revealing Strategy sold more than $335 million in common stock while also acquiring 520 Bitcoin ($34.9 million.) The latest stock sale boosted cash to cover 9.8 months of dividends — up from just 7 — but still well short of the company's stated goal of two years.
Importantly, Strategy's preferred stock STRC recovered to $89 after trading as low as $83 on Thursday. Strategy CEO Phong Le admitted that the shares trading this far below their $100 par level is likely a result of the market losing confidence that Strategy will be able to deliver on paying its perpetual dividend.
"STRC has been around for 10 months. Bitcoin has been around for almost 18 years. Bitcoin is getting into adulthood. STRC is still very much not even a toddler. It's an infant," he told Coinage last week. "So we'll get the product to grow up, mature and to trade around $100. And I feel reasonably confident that we can do that."
The market, so far, is seemingly less confident. In theory, Strategy shifting from monthly to semi-monthly dividend payouts should make the product more attractive. We'll see if more buying interest returns as the next ex-dividend date approaches (June 30.) Without that happening, Strategy will not be able to raise money by issuing new STRC shares.
It could return to selling more Bitcoin to boost cash reserves further, or continue issuing more MSTR shares. MSTR is down 30% year-to-date, trading at levels not seen since 2024.
According to Fundstrat's Sean Farrell, we could still see Bitcoin trade down to $48,000 until the market believes the worst is over. We may get better insight on which direction we're heading by the end of the month.