CEO Phong Le reported in an August 10 post that Strategy's US dollar reserve and its duration to maturity have reached record levels, having increased more than fivefold over 2.5 months. According to the latest data, the reserve stands at $4.65 billion, with a maturity duration of approximately 2.7 years.
During this period, the company added nearly $3.8 billion to the reserve, significantly expanding the liquidity available for paying preferred stock dividends and interest obligations. This rapid growth coincides with a broader approach to capital management, which includes issuing shares and preferred securities, and monetizing bitcoins.
Le stated:
"Our US dollar reserve and its duration are now at a record high. In 2.5 months, we added nearly $3.8 billion to the reserve and increased both metrics by more than five times. This is the 'Digital Credit Capital Concept' in action."
According to an August 10 8-K form, an additional $650 million was added to the US dollar reserve, bringing its balance to $4.65 billion. Between August 3 and 9, the company also sold 1,690 $BTC for $108.6 million, using the proceeds to repurchase STRC shares.
Reserve Grew from $871 Million to $4.65 Billion
The current balance reflects growth from the $871 million figure at the end of May—an increase of nearly $3.8 billion that pushed both the reserve size and its duration to record levels.
By July 27, Strategy had increased its US dollar reserve to $3.75 billion, adding $525 million, which provides coverage for dividends and interest for approximately 2.1 years. The reserve increase also coincided with a $25 million STRC share repurchase, after which the balance reached $4 billion, and then climbed to the latest record level of $4.65 billion.
Strategy developed its "Digital Credit Capital Framework" to govern reserve levels, security repurchases, and potential bitcoin monetization. The company's board of directors has set a minimum US dollar reserve equal to at least 12 months of expected preferred stock dividends and interest expenses, unless a lower level is approved.
Bitcoin Sale Fits into Broader Capital Management Strategy
Against the backdrop of record cash levels, the recent sale of 1,690 $BTC indicates a selective use of bitcoin within the same broader capital allocation system. The transaction generated $108.6 million, which was directed towards repurchasing 1,152,020 STRC shares, rather than increasing the US dollar reserve.
This framework allows for the use of bitcoins to support preferred security repurchases and other capital needs under certain market conditions. The latest transaction implemented this mechanism, while keeping reserve increases and $BTC sales as separate funding measures.
As the reserve expanded, the cash buffer has also taken on a more significant role in covering regular preferred stock dividend and debt obligation payments. The US dollar reserve grew to $3.2 billion, and after the latest addition, its volume reached $4.65 billion.
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