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Analysis: Strategy's Bitcoin engine is malfunctioning, and three types of investors are all facing pressure

MarsBitNews
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Breaking Financial News: According to Bloomberg, the three types of investors in Michael Saylor's Strategy—Bitcoin holders, leveraged equity traders, and preferred stock shareholders—are all under pressure. Strategy sold 32 bitcoins this week, marking its first sale since the end of 2022, breaking the "never sell" pledge. Bitcoin has fallen to a four-month low, Strategy's stock price has dropped about 70% from last year's high, and STRC preferred shares have fallen below their $100 face value. STRC offers an annual dividend yield of 11.5%, and if the market continues to weaken, the debt servicing pressure will keep rising. Analysts point out that increasing the dividend yield will add a $1.7 billion burden, while maintaining it will cause the price to continue declining. Strategy will vote on Monday to change the dividend to twice monthly payments to stabilize the price. Arca's Chief Investment Officer said that protecting all stakeholders is nearly impossible unless Bitcoin rebounds before cash reserves are exhausted. StoneX believes that this sale demonstrates Strategy's ability to fulfill its obligations without substantially reducing its holdings.
BTC-3.54%
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