Strategy CEO Phong Le has explained the company’s recent pause in Bitcoin purchases. Le stated that the current policy stems not from the $BTC price, but from the company’s goal of increasing its dollar reserves.
According to notifications to regulatory bodies, Strategy recently sold over 1,600 Bitcoins for a total of over $108 million. The average price per Bitcoin in the sale was approximately $64,200.
This transaction marked the second consecutive week that the company sold Bitcoin. Strategy also hasn’t made any new $BTC purchases in seven weeks.
Speaking to Fox Business, Le revealed that the company holds 840,000 $BTC on its balance sheet. He noted that Strategy has bought 175,000 Bitcoin and sold 7,000 Bitcoin since the beginning of the year, highlighting that the amount bought is approximately 25 times the amount sold.
Le stated that the company had increased its Bitcoin holdings by 25 percent during the year, adding, “We are now the JPMorgan of the digital economy. We will start buying Bitcoin again later in the year.”
Le added that no specific price level was expected for the new purchases. He stated that the company’s recent priority has been strengthening its dollar reserves, which have increased from approximately $800 million to $4.75 billion.
He noted that the timing of new $BTC purchases depends more on whether the transaction is value-enhancing for ordinary shareholders than on price movements.
“It’s reasonable to call it the bear cycle”
Le, evaluating Bitcoin’s decline from the $126,000 level it reached last October to approximately $64,000, said that the current period could be described as a bear cycle.
Le noted that the downward trend has been ongoing for approximately eight months, recalling that a similar period in 2022 also lasted eight to twelve months. Arguing that a decline of this length is not unusual for Bitcoin, Le stated that the cryptocurrency has recovered more strongly after past declines. He added that past performance does not guarantee future results.
Response to allegations of financial distress
Strategy shares falling from levels above $400 to around $97, and the company’s sale of Bitcoin, have fueled claims of financial difficulties.
Le stated that the company has a leverage ratio of 4 percent, possesses 2.7 years of funds to cover dividend payments, and holds approximately $55 billion worth of Bitcoin on its balance sheet.
“None of this indicates financial distress,” said Le, noting that Strategy shares carry higher volatility along with higher return potential compared to Bitcoin. Le added that investors should therefore have a long-term perspective and a risk appetite that can withstand sharp price movements.
“Sales decisions are made in conjunction with Saylor”
Le, who said he meets with Strategy Chairman Michael Saylor three or four times a day, explained that decisions regarding weekly Bitcoin transactions are made jointly. He added that the company’s finance team and shareholders are also consulted, and that transactions are carried out within the limits set by the board.
Le stated that Strategy, which in the past focused on buying Bitcoin through borrowing, now has a wider range of financial instruments. He noted that the company can now buy and sell Bitcoin, dollars, preferred stock, and common stock, adding that this diversification gives Strategy greater room for maneuver.
Le, who also discussed regulations for the crypto sector, said that clear rules from Congress would be positive for the industry. He stated that a vote on the Clarity Act is expected in mid-September, and that the regulatory efforts of the US Securities and Exchange Commission could also contribute to reducing legal uncertainty in the Bitcoin market.
*This is not investment advice.
