After Strategy had recently sold about 3,588 bitcoins, the debate over its treasury strategy continued. According to the media, the Greyscale Research Department considered that the transaction would help to replenish cash reserves and also enhance the ability of companies to cope with financing expenditures, while Chase Morgan argued that the company's role as both a purchaser and a seller of bitcoin might make its follow-up more difficult for the market to judge.
Cash reserve increased after sale to $25.5 billion
The amount of the Bitcoin sale was approximately $216 million and was part of a new Bitcoin liquidation plan launched by Strategy. Such sales can be used, as required, to replenish cash, to pay preferential dividends and interest expenses, as well as to restructure capital, as set by the company.
Upon completion of the transaction, Strategy ' s cash reserve increased to approximately $25.5 billion. Zach Pandl, Director of Greyscale Studies, argued that the change would help to increase investor confidence in the corporate finance model rather than weaken the market ' s judgement of its financial position.
- Quantity sold: approximately 3,588 BTC
- Transactions: approximately $216 million
- Cash reserve: approximately $2.55 billion
Greyscale says the balance sheet is still holding.
The central reason given by greyscale is that Strategy still holds approximately $52 billion in bitcoin, while the debt is about $7 billion. By this calibre, the overall asset buffer of the company remains large.
Pandl also mentioned that Strategy ' s priority dividends are projected to be less than $2 billion per year. This means that even if a company starts to selectively sell some bitcoin, its main purpose is closer to increasing financial flexibility rather than passive deleveraging.
The greyscale also sees the recent recovery in the SRC priority share price as a sign of an increase in investor acceptance of the financing package. It is judged that a moderate exchange of cash at the time of market volatility can reduce financial pressures and enhance balance sheet stability.
Morgan Chase advocates expanding the equity financing buffer
Unlike the greyscale, Chase Morgan believes that it would be more appropriate for Strategy to continue to replenish the fund through equity financing and to increase the cash reserve to a level sufficient to cover dividends of between 24 and 36 months.
The Bank ' s concern is that if the company also needs to sell bitcoin in a weak market to meet the financing arrangements, the market may find it more difficult to assess its silo strategy. The greyscale maintained that the recent sale was not a sign of weakness, but rather an indication that the company was beginning to manage its treasury and financial arrangements in a more proactive manner.