Strategy Officially Announces Bitcoin Sale... Should Investors Sell?

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Market attention is focused on Strategy, the largest corporate holder of Bitcoin (BTC), as it officially announced plans to sell up to $1.25 billion worth of Bitcoin. However, the media outlet evaluated that this decision is not a negative factor that would undermine the investment logic of Bitcoin, but rather reduced uncertainty by clarifying the selling criteria.

According to the investment media outlet The Motley Fool on July 4 (local time), Strategy announced a new Digital Credit Capital Framework on June 29, granting it the authority to sell up to $1.25 billion worth of Bitcoin. The proceeds from the sale are planned to be used for dividend payments on Stretch preferred shares, interest expenses, and share buybacks. Immediately after the announcement, the price of Bitcoin fell by 2.2% within 24 hours.

Strategy is currently the largest corporate holder, possessing approximately 4% of all future issued Bitcoins. However, the approved sale volume is only a fraction of its current Bitcoin holdings, which amount to approximately $50.6 billion. The media outlet assessed that even if the approved amount were to be sold all at once, it would not be large enough to sharply increase market supply and crash the price. This plan is described as a liquidity mechanism to be used when fundraising is needed, rather than for new Bitcoin purchases.

The biggest change in this framework is that Strategy's likelihood of selling Bitcoin has increased compared to before. Instead, the market can now somewhat predict the timing and scale of future sales by checking cash holdings through quarterly results and press releases. The analysis suggests that this has the effect of reducing investor uncertainty, rather than unpredictable sales.

The media outlet pointed out that Strategy holding an excessive amount of Bitcoin itself is a long-term risk factor. It stated that if the company's financing structure deteriorates in the future, prolonged sales could put pressure on the price of Bitcoin. However, it evaluated that the core fundamentals of Bitcoin, such as its supply limit, mining difficulty, halving structure, scarcity, and neutrality, have not changed at all, and the investment logic has not been undermined by this announcement alone. It also added that Strategy's stock price has fallen by more than 70% over the past 12 months, and Bitcoin has also fallen by about 42% during the same period, indicating that many negative factors have already been reflected in the market price.

The media outlet warned that if Strategy changes its current framework or bypasses it to sell more Bitcoin in the future, it could put significant pressure on the price. However, at this point, while it is true that Bitcoin has become a somewhat riskier asset than before, it concluded that this sales plan alone is not a reason for investors to sell Bitcoin.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*