Strategy will not be forced to sell its large Bitcoin holdings even if its share price drops below net asset value, according to Bitwise chief investment officer Matt Hougan, who criticized claims to the contrary as unfounded.
“There is nothing about MSTR’s price dropping below NAV [net asset value] that will force it to sell,” Hougan said, arguing that fears about automatic liquidation misunderstand the company’s financial structure and the conviction of chairman Michael Saylor.
“It would indeed be very bad for the Bitcoin market if MSTR had to sell its $60 billion of Bitcoin in one go — that’s akin to two years of Bitcoin ETF inflows,” he said.
“But with no debt due until 2027 and enough cash to cover interest payments for the foreseeable future, I just don’t see it happening.”
Concerns Rise After Comments From CEO Phong Le
Speculation began after Strategy CEO Phong Le said the company could consider selling Bitcoin as a “last resort” if its share price fell below the value of its Bitcoin holdings and financing options diminished.
If that scenario unfolded, Le said the company could justify selling some holdings to protect its “Bitcoin yield per share.”
Strategy is also dealing with a prolonged crypto market downturn, as well as the threat of potential removal from the MSCI stock index.
Why Analysts Believe Strategy Is Not Facing Immediate Pressure
Hougan argued the company has ample buffer room to navigate short-term or medium-term volatility.
He noted that Bitcoin’s current trading price remains “24% above the average price at which Strategy acquired its stash ($74,436).”
He also pointed to the strength of the company’s balance sheet, which shows no immediate need for asset sales.
“MSTR has two relevant obligations on its debt: It needs to pay about $800 million a year in interest and it needs to convert or roll over specific debt instruments as they come due,” he said.
“The interest payments are not a near-term concern. The company has $1.4 billion in cash, meaning it can make its dividend payments easily for a year and a half.”
Stock Faces Downward Pressure Amid Index Concerns
Over the last month, Strategy’s share price has dropped sharply.
The company’s stock fell more than 24% over 30 days, closing at $186.01 at the end of trading on Friday.
Part of the decline appears tied to a recent announcement from MSCI, which said it may exclude treasury companies whose balance sheets are composed of more than 50% crypto assets.
Such a change would force index-tracking funds to sell holdings, potentially placing further downward pressure on Strategy’s share price.
Hougan Downplays Long-Term Impact
Despite the concerns, Hougan believes the long-term impact of index changes tends to be far smaller than feared.
“My experience from watching index additions and deletions over the years is that the effect is typically smaller than you think and priced in well ahead of time,” he said.
“When MSTR was added to the Nasdaq-100 Index last December, funds tracking the index had to buy $2.1 billion of the stock. Its price barely moved.”