Strategy Faces $1.76B Annual Obligations as $66.7B Bitcoin Stash Relies on Capital Markets

Odaily News: Bitcoin treasury company Strategy's Bitcoin holdings are now valued at $66.7 billion, with annual obligations including preferred stock dividends and interest totaling approximately $1.76 billion. According to analysis by Regime Intelligence, the company's 840,447 Bitcoins are backed by roughly $22 billion in debt and senior claims, and its continued access to capital markets is the foundation for meeting these obligations.

Stress tests show that Bitcoin's price would need to fall by about 96% before Strategy's Bitcoin holdings and reserves become insufficient to cover its convertible notes; its debt is not a traditional Bitcoin-collateralized margin loan, and there is no BTC margin call mechanism triggered by price declines.

Report author Sherif Saad stated that Strategy needs to maintain a financing cycle to cover annual debt and preferred stock expenses, with cash reserves currently covering about 2.6 times the related annual expenses. If the financing environment deteriorates, the company may rely more on reserves and selling Bitcoin to meet obligations.

Strategy has sold Bitcoin four times since May, most recently selling 1,690 BTC, with proceeds used to pay preferred stock dividends, repurchase shares, and increase dollar reserves. CEO Phong Le said earlier this month that the company has purchased about 25 times more Bitcoin than it has sold this year and plans to resume purchases later this year. (Cointelegraph)