Lates News

CryptoQuant analyst Maartunn wrote that based on the current price, the BTC reserves of Strategy can cover its dividends for about 32 years. However, if Strategy must sell BTC to pay these dividends, selling pressure may push the BTC price down. A decrease in BTC price will also reduce the value of its BTC reserves and shorten the dividend coverage period that it is emphasizing. In other words, if this situation continues, there may be a risk of evolving into a downward spiral. Earlier reports showed that Strategy's issuance of preferred shares, STRC, severely deviated from its anchor and reached a recent low closing price of $88.9. The significant deviation of STRC indicates that the market demands a higher yield, and also suggests that investors' confidence in its credit/dividend stability has decreased. Strategy previously relied heavily on issuing STRC to finance the purchase of Bitcoin; if the price of STRC is below face value, issuing new STRC is no longer cost-effective, akin to borrowing money at a higher cost. Therefore, its "ability to continue buying coins" will be weakened. In response, Strategy stated on social media that "the company's Bitcoin reserves are sufficient to cover dividends for 32 years" in an attempt to stabilize the market.