Company Protects Against Volatility with Strategic Capital Raise
Strategy, the enterprise Bitcoin holding company led by CEO Phong Le, has announced that a significant reason for creating its $1.44 billion US dollar reserve is to protect the company from being forced to sell its Bitcoin holdings during market downturns.
During an interview on Friday, Le stated, "We’re very much are a part of the crypto ecosystem and Bitcoin ecosystem. Which is why we decided a couple of weeks ago to start raising capital and putting US dollars on our balance sheet to get rid of this FUD."
At the beginning of the week, Strategy announced the $1.44 billion US dollar reserve, which was funded through a stock sale. Le explained that the reserve had been raised in just over a week and will fund dividends on preferred stock and interest payments on outstanding debt over a period of at least 12 months. The company has plans to gradually extend this coverage to 24 months. Le noted that this dual-reserve strategy provides them with the flexibility to navigate volatile market conditions without having to liquidate Bitcoin.
New Reserve Neutralizes Dividend Concerns and Strengthens Market Confidence
The creation of the USD reserve comes amid concerns that Strategy may be unable to continue servicing its debts and dividend payment obligations if the stock price falls too far. "And it’s really this FUD," Le said on Friday. This move represents a strategic shift from the company’s previous approach, which primarily relied on issuing debt or shares to acquire more Bitcoin.
Le emphasized that the company would not have an issue paying its dividends and was unlikely to be forced to sell its Bitcoin. However, he noted that FUD (Fear, Uncertainty, and Doubt) was spread that the company would fail to meet its dividend obligations, which caused some investors to initiate short Bitcoin bets.
He added that the short time frame used for raising the $1.44 billion—representing 21 months' worth of dividend obligations—was intended to demonstrate that the company is still capable of raising money during a Bitcoin downcycle.
Last week, Le mentioned that Strategy would only consider selling Bitcoin if its stock fell below net asset value and the company no longer had access to fresh capital. The company also launched a "BTC Credit" dashboard, which claims it currently has enough assets to service dividends for more than 70 years.
As of now, Strategy holds over 650,000 BTC, purchased at an average price of $87,000 per coin. The creation of the USD reserve ensures that the company can avoid selling Bitcoin during short-term downturns, allowing it to remain aligned with its long-term crypto-focused strategy.
Corporate BTC Treasuries Gain Importance Amidst Miner Pressures and Volatility
The timing of the reserve also coincides with mounting pressure on Bitcoin miners, whose production costs have risen following recent halvings. As miners face increasing pressure with tighter margins and higher break-even prices, analysts suggest that corporate holders like Strategy are increasingly contributing to market stability. Strategy’s moves, along with its substantial BTC treasury, position it as one of the market’s biggest long-term claimants.
As miners cut supply and short-term volatility intensifies, institutional balance sheets—rather than mining output—are playing a more significant role in determining investor confidence. A group of market watchers also argues that Strategy’s reserve signifies a maturing phase for Bitcoin as a corporate asset, indicating a shift from speculative accumulation towards structured financial management.
While the miners' and overall production costs of Bitcoin are often discussed on a smaller scale compared to other cryptocurrencies, Strategy’s balance sheet strength and proactive risk management now play a significant role in market confidence, according to industry analysts. The reserve suggests that even during adverse cycles of the crypto market, corporate holders can effectively minimize liquidity risk.