Bitwise CIO: Strategy Unlikely to Sell Bitcoin Despite Stock Drop
Bitwise chief investment officer Matt Hougan said Strategy (MSTR) is unlikely to be forced into selling its Bitcoin holdings if its share price falls, citing the company’s liquidity, debt profile, and cost basis.
In a note on Tuesday, Hougan said a decline in MSTR below its net asset value would not trigger mandatory sales of Bitcoin (BTC), referencing chairman Michael Saylor’s long-standing support for the asset.
Hougan added that a sudden sale of Strategy’s roughly $60 billion in Bitcoin would be materially negative for the market — comparable to two years of Bitcoin ETF inflows — but argued such an event is improbable given the firm has no debt maturities until 2027 and holds sufficient cash to meet interest obligations for the foreseeable future.
Concerns about potential sales emerged after CEO Phong Le said last week the company could consider selling part of its Bitcoin as a “last resort” if Strategy’s market capitalization fell below the value of its Bitcoin holdings and alternative financing options were unavailable, in order to protect the firm’s “Bitcoin yield per share.”
Hougan says Strategy has room to maneuver
According to Hougan, Bitcoin trading near $92,000 sits about 24% above the average purchase price of Strategy’s holdings ($74,436), reducing pressure to sell at current levels.
He noted two primary obligations on the company’s balance sheet: approximately $800 million in annual interest payments and the need to convert or refinance certain instruments at maturity.
“The interest payments are not a near-term concern,” he wrote, pointing out the company holds $1.4 billion in cash, providing enough coverage for roughly the next 18 months.
Over the past 30 days, MSTR has fallen 24.69%, closing at $186.01 on Friday.
Downward pressure may be partly linked to an October announcement from Morgan Stanley Capital International, which said it may exclude digital-asset treasury companies from its indices if more than 50% of their balance sheet comprises crypto assets. Such a change would require index-tracking funds to sell affected constituents, potentially adding pressure to MSTR.
Hougan said he does not expect that to have a significant long-term effect on sentiment or share performance, noting that index changes often have smaller impacts than anticipated and tend to be priced in advance. He cited MSTR’s addition to the Nasdaq-100 Index in December, when index-tracking funds needed to buy about $2.1 billion of the stock and the share price “barely moved.”
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