Foreign media: Bitwise Chief Investment Officer Matt Hougan believes that bitcoin may be approaching the bottom of this round as deleveraging from STRC products under Strategy continues. The core judgement of the article is that the demand structure, which was driven by a single large buyer in the past, is changing and that, if the market is to pick up, the dominant forces may shift to broader institutional funding.

STRC Falling Trigger

STRC is a sustainable priority stock product launched by Strategy with the goal of maintaining close to $100 in nominal terms as much as possible while providing higher returns. Hougan mentioned that Strategy had financed approximately $10.5 billion through this instrument, and that part of the funds had been used to continue to raise bitcoin.

But after the simultaneous weakening of bitcoin and MTR stock prices, the StRC fell markedly last week, one time near about $75. Barron's report stated that the product had touched a historical low of 73.62 dollars, and the market then started to focus on whether Strategy would continue to cover priority share dividends.

Strategy Recapitalization

In the face of pressure, Strategy moved up this week to 12 per cent of the STRC annualized dividends, and approved up to $2 billion in regular and priority stock buy-back plans. At the same time, the company has introduced new capital management arrangements that allow the sale of bitcoin when needed to replenish reserves, meet dividends and debt obligations and finance stock buy-backs.

Strategy was also reported to have authorized up to $1.25 billion in bitcoin sales to augment reserves. This means that the role of “continuing one-way buyers” — a role familiar to the market in the past — may change. According to Hougan, the future of Strategy is not necessarily the world's strongest unilateral purchaser of bitcoin.

Next round or agency.

However, Hougan does not think that Strategy is close to being forced to sell. He stated that the company still had sufficient assets to cover debt and priority equity-related obligations, and that balance sheet pressure would not be concentrated unless there was a further sharp decline in Bitcoin prices and a long-term low.

He compares this round with the loss of a bitcoin premium after cattle market in 2019 to 2021. In his view, such structural products could attract large amounts of money into bitcoin at an upward stage, but when the support was weakened, there would also be a painful replacement.

Hougan expects that, if the next round of bitcoin rises, the push will come more from banks, regulatory agencies, pension funds, endowment funds, sovereign wealth funds and financial consultants than from continuing to rely on single-firm buying.

Market attention to bottom signals.

The article also mentioned that in the United States, when employment data were weaker than expected in June, the risk bias rebounded at a short line of $62,000 on a bitcoin stop. Reuters claims that 57,000 new jobs were created that month, below market expectations, leading to a high United States share and a weak United States dollar, and that traders have reduced their bets on the Fed ' s continued tight policy.

  • Whether or not the MSTR stock price has broken down its bitcoin holdings
  • Is there an extreme reading of the encrypted fear and greed index?
  • Whether or not the funding rate is negative

According to Hougan, the bottom of the market is difficult to be accurately identified at the moment, but the SRC deleveraging suggests that the cycle may have reached its final stage and free space for a new round of bitcoin increases in the autumn.