Bitcoin fell sharply from $80,000 to $60,000 after Strategy Inc. disclosed on June 1 that it had sold 32 BTC during the previous week. This move triggered panic selling across cryptocurrency markets and led to significant price swings.
Standard Chartered defends strategy after Bitcoin drop
Geoffrey Kendrick, Global Head of Digital Assets Research at Standard Chartered, addressed the market reaction, attributing the turmoil to a “communication challenge” by Strategy Inc., rather than any underlying weakness in Bitcoin itself.
Geoffrey Kendrick described Bitcoin at $64,000 as “a screaming buy,” highlighting that concerns about Strategy’s action stem from transparency issues rather than market fundamentals.
Strategy Inc., an enterprise software and business intelligence company, maintains custody of 843,775 BTC and stands as the largest institutional holder of Bitcoin worldwide. The firm has historically committed to a “never sell bitcoin” approach, using debt and equity offerings to purchase additional coins and expand its holdings.
This strategy enabled Strategy Inc. to take advantage of a high market Net Asset Value (mNAV) ratio, allowing it to issue new shares, use the capital to buy more Bitcoin, and increase shareholder value beyond the effects of equity dilution.
Mini dictionary: mNAV (market Net Asset Value) ratio, a metric comparing a company’s stock market value to the market value of its underlying assets, used to assess potential dilution or premium from share issuance.
Shift in Bitcoin management model
With mNAV now approaching 1.0, Strategy Inc. has changed its approach. The company is restructuring its Bitcoin holdings to support STRC, a perpetual preferred stock that pays a 12% annual dividend and carries around $10 billion in notional value. STRC’s price recently dropped from $100 to an intraday low of $71.25 on June 26, though it currently trades near $90.
To shore up its dividend reserve, Strategy has started a program to periodically sell part of its Bitcoin holdings. This plan aims to generate up to $1.25 billion for the dividend fund, which currently holds $2.55 billion in USD—enough to cover about 17.4 months of STRC dividend payments.
Strategy Inc.’s management compares its forward guidance to central bank communication, aiming for greater clarity on future Bitcoin sales to reduce market uncertainty.
Strategy’s latest transaction involved the sale of 3,588 BTC, valued at $216 million, marking its largest one-time Bitcoin sale so far.
| Metric | Value |
|---|---|
| Bitcoin held by Strategy | 843,775 BTC |
| Biggest recent sale | 3,588 BTC ($216 million) |
| STRC notional value | $10 billion |
| Dividend reserve fund | $2.55 billion |
Diverging views from industry analysts
Not all analysts support the revised model. JPMorgan researchers warned that a formal Bitcoin sales framework introduces “avoidable two-way risk,” as Strategy Inc. could become both a buyer and a seller in the market.
Meanwhile, Zach Pandl, head of research at Grayscale, argued these sales could actually strengthen Strategy’s financial base and help stabilize Bitcoin’s market value over the longer term.
At the close of trading, Bitcoin recovered to nearly $63,971, posting a 1.5% gain over the previous 24 hours, while shares of Strategy hovered around $93.99.
