Bitwise CIO: After the STRC Event, Strategy's Importance in the Bitcoin Market May Decline

Bitwise Chief Investment Officer Matt Hougan analyzed the volatility of Strategy's (MSTR) STRC.
He believes that Strategy currently holds approximately $49.6 billion in Bitcoin and $2.6 billion in cash, with assets far exceeding its debt and preferred stock obligations, so there is no liquidation risk. The company's newly launched Digital Credit Capital Framework allows it to flexibly sell Bitcoin to pay dividends based on market conditions, rather than forcibly maintaining STRC's $100 face value. Hougan emphasized that Strategy has been the world's largest Bitcoin buyer and a source of one-way demand over the past few years, but this situation is very likely over.
Going forward, Strategy will buy or sell Bitcoin flexibly based on market conditions, but it will not become a large-scale seller (with limited annual forced selling). If Bitcoin prices rebound, it could still become a net buyer.
Overall, Strategy's importance in the next cycle will be lower than in the previous one. He believes that the volatility of STRC reflects the deleveraging of excessive leverage in the market, a typical characteristic of the late stage of a bull market. As these mismatched funds are squeezed out, a market bottom is forming, and a new bull market is expected to begin this fall.