Strategy announces $1.44 billion “US dollar reserve” to avoid participating in bitcoin fire sale
The digital treasury company also lowered its outlook for full-year operating income, net income, and earnings per share by more than 90% compared to its October 30 guidance.
Strategy exists to buy Bitcoin.
It does not want to sell bitcoin. That’s the opposite of its raison d’être.
However, since Strategy has sold debt of various sorts to buy its roughly $56 billion in bitcoin, it owes interest and dividend payments. This raises the prospect that the firm might need to sell some of its crypto hoard in order to meet those obligations. On a podcast on Friday, CEO Phong Le said that “we would sell bitcoin if we needed to fund our dividend payments below 1x mNAV.”
(mNAV refers to the ratio of Strategy’s enterprise value to the value of its bitcoin holdings.)
To that end, the digital asset treasury company founded by Michael Saylor announced that it’s established a US dollar reserve of $1.44 billion, enough to cover 21 months of these payments. The aim is to have enough socked away to eventually cover two years or more of these obligations. This reserve was created from funds received by Strategy’s at-the-market share offering program.
Shares are sinking Monday morning, hitting their lowest levels since October 2024.
The move may help quell fears that Strategy would be caught up in a wave of bitcoin liquidations and potentially add more selling fuel to the fire. On this note, Saylor added that the USD reserve “will better position us to navigate short-term market volatility.”
Strategy also cut its outlook for bitcoin prices at year-end 2025 to a range of $85,000 to $100,000 (previously $150,000). As such, management also lowered its outlook for full-year operating income, net income, and earnings per share by more than 90% compared to their October 30 guidance.
