Saylor’s Strategy grows USD reserve to $3.2B, skips buying BTC again

Michael Saylor’s Strategy (NASDAQ: MSTR) threw another curveball today, instead of announcing the weekly Bitcoin purchase that the market had grown used to until recently. For the second straight week, the leading Bitcoin treasury firm disclosed that it used the proceeds from its MSTR common stock sales to beef up its dollar reserve, growing that stash to $3.225 billion instead of buying Bitcoin. 

The dollar reserve the firm maintains to cover dividend obligations on its preferred shares is the only stack that has grown. The total Bitcoin count in its treasury has not been altered in weeks: 843,775 Bitcoins. 

According to Strategy’s Form 8-K filing with the Securities and Exchange Commission (SEC) on Monday, Strategy raised about $263.5 million in proceeds and roughly $225 million in net additions to cash by selling 2,732,318 of its Class A common shares (MSTR) through its at-the-market equity program. 

Why is Strategy stacking dollars instead of buying Bitcoins?

Strategy paid an average of $75,476 on each of the 843,775 Bitcoins it holds. With Bitcoin currently trading at  $64,700, that stash is worth close to $55 billion, down around $9 billion on the $63.69 billion it cost initially. 

Even with those price pressures, Strategy has to meet dividend obligations on several classes of preferred stock, especially the Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC or “Stretch.” The slide of those securities below their $100 par value was the reason the company stopped buying Bitcoin in the first place, according to CEO Phong Le, as Cryptopolitan reported.

Le also said STRC’s recovery from its $75 low came from the confidence boost that Strategy’s dollar cushion gave investors. 

He went further to calm fears by saying that Strategy won’t be in any real trouble as long as Bitcoin avoids falling toward the $8,000 to $10,000 level

The firm’s Digital Credit Capital Framework set a 12-month coverage minimum for the firm. Its dollar reserve now covers close to two years of preferred dividends. 

JPMorgan called the growing reserves and firming institutional demand in Bitcoin futures “encouraging signs.” 

How close is Strategy to a recovery? 

Saylor and Strategy have readjusted to the prolonged slide in Bitcoin price by selling 3,588 Bitcoins for about $216 million between June 29 and July 5, its largest sale date. Before that, it raised $2 million by selling its stash to cover dividend payments. The firm formalized those sales with its board-approved Digital Credit Capital Framework in late June. 

Strategy’s MSTR stock remains down 38.6% on the year. It closed Friday at $94.85 and traded up about 1.21% as of this Monday report, near $96.

Strategy remains the dominant name in a crowded field. Bitcoin Treasuries data counts 197 public companies with some form of Bitcoin holding, and Strategy’s 843,775 coins, close to 4% of Bitcoin’s 21 million supply cap, tower over the next tier: Twenty One Capital at 43,514 BTC, Metaplanet at 43,000, MARA Holdings at 36,303, and the Adam Back and Cantor Fitzgerald-backed Bitcoin Standard Treasury Company at 30,021.

Investors will watch the next weekly filing for the same three lines: whether the Bitcoin count moves, how much further cash grows, and where STRC trades against its $100 target.