Strategy CEO Outlines Specific Conditions for Bitcoin Sales

Strategy CEO Phong Le has outlined the precise conditions under which the company would sell portions of its Bitcoin holdings, stating that such sales will not move the markets despite the firm owning more than 4% of the digital currency's maximum supply.

Le specified during a Friday interview with CNBC that Strategy will sell Bitcoin to pay the dividend on its Series A Perpetual Stretch Preferred Stock (STRC), a corporate credit instrument that pays an 11.5% dividend to holders, and to defer or offset taxes. He added that the company would only sell BTC to pay for the yield owed to holders of its credit instruments if the sales are accretive to Strategy’s shareholders, meaning the company increases the BTC per share metric.

“I believe in math over ideology, and at the point where selling Bitcoin versus selling equity to pay a dividend is better for our Bitcoin per share, and for our common shareholders, we will do it,” Le said. The executive stressed that any sales must benefit shareholders through that BTC per share measure.

The comments follow remarks from Strategy co-founder Michael Saylor, who said in a Tuesday earnings call that the company might sell portions of its BTC periodically. Saylor stated, “We’ll probably sell some Bitcoin to fund a dividend, just to inoculate the market, just to send the message that we did it.” He added that if BTC appreciates by more than 2.3% annually, Strategy could fund its dividend payments forever without selling Strategy’s stock and diluting shareholders.

“We could stop selling MSTR common stock right now,” Saylor said, adding, “We can fund the dividends with Bitcoin sales.” These statements had stoked fears among BTC investors about the potential impacts of Strategy’s sales on Bitcoin’s market price.

Strategy holds 818,334 BTC, valued at more than $66 billion, making it the largest publicly traded BTC treasury company according to data from BitcoinTreasuries. Le addressed concerns that treasury companies offloading BTC may create selling pressure that negatively impacts Bitcoin’s price, noting that BTC’s daily trading volume of about $60 billion is enough to absorb the more than $1 billion in annual dividends that Strategy owes.

Le maintained that the scale of Strategy's potential sales would not significantly affect asset prices given current market liquidity.