Concerns that Strategy (MSTR) may be forced to sell Bitcoin $BTC$68,882.90 Amid the price decline, Chairman Michael Saylor said in an interview with CNBC that it was an “unfounded concern” and affirmed the company’s commitment to continued purchases.
“Our net leverage ratio is half that of a typical investment-grade company,” Saylor said. “We have 50 years worth of dividends and Bitcoin, and we have two and a half years of dividends left on our balance sheet in cash alone…We’re not going to sell, we’re going to buy Bitcoin. I think we’ll be buying Bitcoin every quarter forever.”
Last week, the company added 1,142 people. $BTC The average price per coin was $78,815, and it was transferred to holdings for approximately $90 million. The company’s total stack currently stands at 714,644 coins, purchased for approximately $54.35 billion, giving an average cost per Bitcoin of $76,056, well above the current price of approximately $69,000.
Saylor’s comments come as Bitcoin has seen significant volatility (nearly universal decline) over the past few months, but he emphasized that volatility is part of asset design. “The key to keep in mind is that Bitcoin is digital capital,” he continued. “It’s going to be two to four times more volatile than traditional capital like gold, stocks, real estate. It’s outperforming traditional capital over the last decade. It’s the most useful global capital asset in the world, and it can be leveraged more. It can be traded in more ways than any other type of capital asset. So volatility is the bug, but volatility is the feature.”
Strategy reported an operating loss of $17.4 billion and a net loss of $12.6 billion in the fourth quarter, primarily reflecting non-cash mark-to-market accounting due to the decline in Bitcoin prices. This result highlights how fluctuations in the value of cryptocurrencies continue to impact the company’s financial statements despite its long-term investment strategy.
Saylor also addressed the idea that Bitcoin’s current price level may represent a new form of market maturation, which he characterized as a good thing.
Saylor said Strategy’s balance sheet and digital credit business are central to its strategy. The company’s digital credit structures have emerged as one of the most actively traded credit products of the past decade, generating significantly higher cash flows than traditional fixed income products and far outpacing the trading volume of preferred stock.
“There is no credit risk on the company’s balance sheet,” he said.
Saylor declined to provide short-term Bitcoin price predictions, but reiterated that he is confident in long-term performance. “I don’t really make 12-month predictions. I think Bitcoin will double or triple the performance of the S&P over the next four to eight years. And I think that’s the only thing we need to know.”
The company’s stock price fell 3% on Tuesday, bringing it down 15% year-to-date and 60% year-over-year.
