- Strategy establishes a $1.44 billion USD reserve to fund preferred-stock dividends and service debt.
- Company’s total Bitcoin holdings now stand at 650,000 BTC after purchasing 130 additional coins.
- Total investment into BTC is approximately $48.4 billion, at an average purchase price of about $74,436 per BTC.
Strategy, the company headed by Michael Saylor and custodian of the largest public Bitcoin treasury, has moved to protect it from volatility in cryptocurrency markets. The firm disclosed a $1.44 billion cash reserve, financed through recent stock sales, to guarantee the payment of dividends and also service its debt independent of market fluctuations in the price of Bitcoin. It also purchased 130 additional BTC, bringing its total to 650,000 BTC, reiterating BTC as a core treasury asset.
Cash Reserve Creation to Manage Risk
According to filings, Strategy utilized proceeds from its at-the-market common stock sales in establishing a USD reserve. The reserve would be used for paying dividends on its preferred stock and interest outstanding, providing the company with a buffer against crypto market swings.
The company says the reserve currently covers about 21 months of dividend obligations, and aims to expand it to cover two years or more. This reflects a strategic shift from relying heavily on the value of Bitcoin to adding in stable-value assets that make for financial stability.
Also Read: Bitcoin(BTC) Rebounds as $8B in Short Liquidations Loom Over $100K
BTC Holdings at Record High
Along with the reserve announcement, Strategy revealed that it bought an extra 130 BTC for about $11.7 million, bringing its stash to a total of 650,000 BTC.
With Strategy acquiring BTC at an average price of about $74,436, the total investment in BTC by the company stands at approximately $48.4 billion. That stash now represents approximately 3.1% of Bitcoin’s fixed 21 million maximum supply.
In other words, establishing a sizeable cash reserve is a signal to investors and markets that Strategy aims to insulate itself from short-term volatility, yet still maintains aggressive BTC accumulation. The dual reserve, BTC and USD, gives flexibility and reduces pressure to liquidate holdings in case crypto markets turn bearish.
This might create more stability within the firm’s payout commitments and could therefore be more attractive to more conservative institutional investors. This also reflects a maturation of the “Bitcoin as treasury reserve” thesis into a hybrid asset/liability management model.
Also Read: Bitcoin Cash (BCH) Technical Structure Points to Potential $637–$640 Target
