Strategy selling hundreds of millions worth of bitcoin raises question about its capital-allocation playbook
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Strategy's (MSTR) recent bitcoin trades suggest the company is attempting to find its footing amid bitcoin's BTC $ 63,032.10 bear-market slide, which raises questions about its capital markets strategy.
Key facts
- Indeed, while bitcoin and Strategy's common stock, MSTR, are lower on Monday, STRC continues to rebound from last week's low below $75, rising another 2.1% to shy of $90
- The main culprit for the billions of "paper losses" thus far has been a dramatic decline in the price of bitcoin from $74,000 in late May, when Strategy sold a tiny 32 bitcoin, to below $58,000 last
- A bounce back to about the $64,000 over the July 4 weekend was cut short Monday by the sale of 3,558 bitcoin
- Strategy now holds 843,775 bitcoin purchased at an average price of $75,476, maintaining its position as the largest publicly traded corporate holder of the cryptocurrency
Summary
Strategy this morning announced the sale of 3,588 BTC days after buying 3,657 BTC at far higher prices. Strategy's sale of 32 bitcoin in late May sent crypto markets plunging, with BTC falling from nearly $74,000 to below $58,000 last week. The company booked an $8.32 billion loss on its bitcoin holdings in the second quarter. Alongside today's news of $216 million worth of bitcoin sales, the company also disclosed that it had booked an "unrealized" loss of $8.31 billion on its bitcoin holdings in the second quarter as the price fell from about $68,000 on April 1 to close June at roughly $60,000.