The market was divided around the need for Strategy to sell some bitcoin. According to the media, the Greyscale Research Manager, Zach Pandl, argued that if the company, which held a large amount of bitcoin, continued to stabilize the price of the financing instrument by raising the preferred dividends, it might not be able to restore market confidence, but rather increase pressure.
Pandl claims to deal directly with the burden of assets
Pandl mentioned that if Strategy raised its STRC priority share by 50 basis points next week, the additional burden of dividends in the next two years would increase by about $100 million. In his view, such an approach would be of limited help in boosting market confidence.
He therefore proposed a more radical solution, i.e. the sale of a portion of the Bitcoin reserve. The size of this section, by reporting title, is approximately $3 billion. The article discusses this recommendation in the context of Strategy ' s current valuation commitment.
Market pricing lower than bitcoin hold value
The report cites researcher André Dragosch ' s statement that the current valuation given to Strategy by the market is below the base value of the bitcoin held on his balance sheet. This means that investors are factoring potential currency selling risks into prices.
Dragosch further states that current valuations even imply market expectations that Strategy might sell about 1 per cent of its Bitcoin holdout. He made the opposite judgement, however: if investors thought that the probability of selling money was still low, current prices might be more attractive.
Opponents say there's no need to rush the money.
Not all marketers support the sale of bitcoin. An encrypted commentator, Bit Paine, argues that the design of the STRC itself carries some self-regulation. As prices fall, their real rate of return rises, thus attracting risk-taking buyers.
He said that the current market was more like a panic evacuation, resulting in the price of STRC being pushed below its credit fundamentals. A more appropriate short-term approach would be to increase the dollar reserve as far as possible, with only a small adjustment, or even a moratorium on the adjustment of interest rates, and to allow the market to find its own appropriate pricing, than to proactively raise interest rates or sell bitcoin.
Adam Back, CEO of Blockstream, shares this view. He stated that the SRC was priced as a debt in distress, ignoring the fact that Strategy had a longer debt-transferable term and thus failed to reflect its overall capital structure.