Peter Schiff Warns Strategy’s 840K Bitcoin Holdings Could Bring ‘Much Greater’ Losses
Peter Schiff warned that Strategy’s new bitcoin sale policy could result in much larger realized losses after the company sold 3,588 bitcoin for about $216 million under its BTC Monetization Program. Key. . .
Peter Schiff warned that Strategy’s new bitcoin sale policy could result in much larger realized losses after the company sold 3,588 bitcoin for about $216 million under its BTC Monetization Program. Key TakeawaysPeter Schiff said the bitcoin sale marks a risky shift in Strategy’s model that could increase realized losses if more BTC is sold. Strategy sold 3,588 bitcoin for about $216 million, raising concerns about further selling pressure. Analysts said the policy could increase crypto market volatility. How Strategy’s Confirmed Bitcoin Sale Turned Into a Market SignalStrategy Inc. (Nasdaq: MSTR) sold 3,588bitcoin, raising about $216. 3 million, the company announced on July 6. It said proceeds funded preferred dividends and reserve needs under itsBTCMonetization Program. After the sale, Strategy held 843,775BTCwith an aggregate purchase price of about $59. 08 billion. As of this writing,BTCtrades near $63,478, below Strategy’s average purchase price of about $75,476. “MSTR spent the last two weeks sellingbitcoin. The average price on 3,588bitcoinsold was $60,196. 73,” economist andgoldadvocate Peter Schiff wrote on X July 6, adding:“Given MSTR’s average cost, that’s a realized loss of about $15K perbitcoin, or about $54 million. With over 840Kbitcoinleft to sell, the total losses will be much greater. ”Strategy’sBitcoinMonetization Program is a capital management plan that allows, but does not require, the company to sellbitcointo raise cash for reserves, dividends, debt reduction, share buybacks, and other corporate purposes. Why Schiff Says Saylor’s Treasury Model Now Cuts Both WaysSchiff argued that Strategy has shifted from raising capital to accumulatebitcointo selling it to cover obligations. According to Schiff, the framework couldallowup to $3. 25 billion inbitcoinsales, including $1. 25 billion for reserves and $2 billion for buybacks. “MSTR now has a completely different business model,” thegoldadvocate wrote:“Instead of selling common and preferred stock and issuing debt to buybitcoin, the new strategy is to sellbitcointo pay interest and dividends, pay off debt, buy back shares it sold, and hope thatbitcoin’s price goes way up. ”What Analysts Are Watching Before Strategy’s Next MoveCoin Bureau CEO Nic PuckrinsaidStrategy is in “a very difficult position” due to STRC dividend obligations. He does not expect forced liquidations, but warned even small sales could hurt sentiment ifbitcoinstays weak. Strategy’s cash reserve covers about 17 months of dividends, while analysts have suggested 24 to 36 months for stability. Michael Saylordefendedthe policy asliquiditymanagement, citing $2. 55 billion in USD reserves and $1. 25 billion in monetization capacity, or 25. 9 months of coverage. Not all analysts view the policy negatively. Bitfinex analystsexplainedStrategy’s authorization to sell up to $1. 25 billion inbitcoincould reduce forced-selling risk by addingliquidityduring stress. Future filings will show whether Strategy sells morebitcoin, raises capital, or resumes accumulation. Zach Pandl, head of research atcryptoasset manager Grayscale, wrote on X on July 6 after Saylor announced Strategy’s 3,588BTCsale:“In my view,BTCsales by Strategy are needed to restore confidence in STRC and its structure in general. I am encouraged to see they executed some sales last week. Further reduces short-term tail risks forbitcoin. I would expect STRC to continue to trade well. ”