Strategy CEO Phong Le explained the company's recent pause in Bitcoin purchases. Le stated that the current policy is not driven by the price of $BTC, but by the company's aim to increase its dollar reserves.
According to filings sent to regulators, Strategy recently sold over 1,600 Bitcoins for a total exceeding $108 million. The average price per Bitcoin in this transaction was approximately $64,200.
This transaction marked the second consecutive week of Bitcoin sales by the company. Furthermore, Strategy has not made any new $BTC purchases in the last seven weeks.
In an interview with Fox Business, Le reported that the company holds 840,000 $BTC on its balance sheet. He noted that since the beginning of the year, Strategy has purchased 175,000 Bitcoins and sold 7,000, emphasizing that the number of Bitcoins bought is roughly 25 times greater than the number sold.
Le stated that over the year the company has increased its Bitcoin holdings by 25 percent, adding: "We are now the JPMorgan of the digital economy. Later this year we will begin buying Bitcoin again."
Le added that no specific price level is expected for new acquisitions. He said the company's recent priority has been strengthening its dollar reserves, which have grown from about $800 million to $4.75 billion.
He noted that the timing of new $BTC purchases depends more on whether a deal benefits common shareholders than on price fluctuations.
"Quite Reasonable to Call This a Bear Cycle"
Le, assessing Bitcoin's decline from the $126,000 level reached last October to around $64,000, stated that the current period could be characterized as a bear cycle.
Le noted that the downward trend has persisted for about eight months, recalling that a similar period in 2022 also lasted from eight to twelve months. Arguing that a downturn of this duration 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.
In Response to Claims of Financial Difficulty
The drop in Strategy's stock from above $400 to around $97, along with the company's Bitcoin sales, has fueled claims of financial difficulty.
Le stated that the company has a 4 percent leverage ratio, has funds for 2.7 years to cover dividend payments, and holds approximately $55 billion worth of Bitcoin on its balance sheet.
"None of this indicates financial difficulty," Le said, noting that Strategy's stock possesses greater volatility, as well as higher return potential compared to Bitcoin. Le added that investors should have a long-term perspective and a risk tolerance capable of withstanding sharp price swings.
"Sell Decisions Are Made Jointly with Saylor"
Le, who says he meets with Strategy Chairman Michael Saylor three to 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 of directors.
Le stated that Strategy, which in the past specialized in purchasing Bitcoin using borrowed funds, now has a wider range of financial instruments at its disposal. He noted that the company can now buy and sell Bitcoin, dollars, preferred and common stock, adding that such diversification gives Strategy more room to maneuver.
Le, who also discussed crypto sector regulation, stated that clear rules from Congress would have a positive impact on the industry. He noted that a vote on the Clarity Act is expected in mid-September, and that efforts by the U.S. Securities and Exchange Commission to regulate could also help reduce legal uncertainty in the Bitcoin market.
*This is not investment advice.
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