Strategy Unveils $1.44 Billion Dollar Reserve to Avoid Bitcoin Sale
Strategy, a digital asset treasury company, is actively managing its substantial bitcoin holdings. With approximately $56 billion invested in bitcoin, the firm faces obligations related to debt interest and dividend payments. To address this financial challenge, Strategy has established a significant reserve.
Launch of $1.44 Billion Dollar Reserve
On a recent podcast, CEO Phong Le confirmed that Strategy has created a US dollar reserve totaling $1.44 billion. This reserve is designed to cover approximately 21 months of future dividend payments. The primary goal is to ensure that the firm can meet its financial commitments without resorting to selling its bitcoin assets.
Reasons Behind the Reserve Fund
The establishment of the reserve comes from proceeds generated through Strategy’s at-the-market share offering program. This initiative aims to stabilize the company’s financial position amidst fluctuating market conditions.
- Reserve amount: $1.44 billion
- Coverage: 21 months of dividend payments
- Objective: To cover two years or more of obligations
Market Implications and Future Outlook
Strategy’s recent strategies aim to alleviate concerns about potential bitcoin liquidations. CEO Michael Saylor emphasized that the new USD reserve will enhance the company’s ability to navigate short-term volatility in the cryptocurrency market.
Despite these measures, Strategy has lowered its bitcoin price forecast for year-end 2025. The revised expectation now sits between $85,000 and $100,000, a significant decrease from the prior estimation of $150,000.
Revised Financial Projections
In line with the updated bitcoin outlook, Strategy has revised its estimates for full-year metrics significantly. Expected reductions include:
- Operating income: Decreased by over 90%
- Net income: Decreased by over 90%
- Earnings per share: Decreased by over 90%
As Strategy navigates these financial complexities, the focus remains on preserving its bitcoin assets while ensuring the firm can fulfill its obligations through the newly established reserve.
