What to know:
- Saylor says Bitcoin turns economic value into a secure and transferable digital asset.
- Holding 840,447 BTC, Strategy’s treasury rose above its $75,385 average cost per coin.
- MSTR share sales raised $333.7 million to cover STRC dividends and stock repurchases.
Michael Saylor restated his Bitcoin outlook on Aug. 23, presenting the asset as a digital tool for storing and transferring economic value. The remarks came as Bitcoin’s market price moved above Strategy’s average purchase cost for its 840,447 BTC reserve.
In an X post, Saylor said Bitcoin converts “economic energy” into digital form. He said the value can be linked to a person, family, company, machine, or state.
Saylor uses “digital energy” to explain how BTC can store and transfer value. The term has no formal meaning in law, accounting, or technology. It reflects his investment view rather than an established definition of Bitcoin.
Strategy’s Bitcoin Treasury Moves Above Cost
Strategy has incorporated Saylor’s thesis in its corporate treasury. In its most recent US Securities and Exchange Commission filing, it held 840,447 BTC by Aug. 16.
Also Read: Bitcoin Jumps 24%—Is Standard Chartered’s $100K Target Too Low?
It bought the cryptocurrency at a cost of $63.36 billion, inclusive of transaction fees. This brought its average cost to $75,385 per Bitcoin.
The investment is equivalent to 4% of the total 21 million BTC. The calculation includes BTC that have not been mined.
As of now, BTC is trading at above the $77,000 level. With this value, Strategy’s investment was estimated to be worth around $64.86 billion. This amount was around $1.50 billion higher than the total cost of acquisition.
Source: CryptoSlate
The margin is an unrealized one that varies with the value of the Bitcoin. It does not include debt, tax liabilities, expenses, and preferred stock dividends.
Strategy Directs Capital Toward STRC
The capital markets platform is called “Digital Credit” by Strategy. It comprises the listed preferred shares, such as STRC, STRF, STRK and STRD. They do not represent blockchain-based tokens.
STRC is the variable-rate perpetual preferred share trading on Nasdaq. It has a stated amount of $100 and provides cash dividends if they are approved by Strategy’s board.
The prospectus mentions that the management will not maintain the market price close to $100. Strategy used dividends’ alteration and repurchase of shares to back up STRC.
On Aug. 17, it was reported that Strategy bought back 1.39 million STRC shares, paying $132.2 million during the week prior to this date. MSTR common-share sales provided the necessary funds.
Strategy raised $333.7 million by selling 3.46 million MSTR shares during the period from Aug. 10 till Aug. 16. $52.4 million was assigned to STRC dividends, while $132.2 million was used for repurchases.
Meanwhile, Strategy added $149.1 million to its US dollar reserve, lifting the balance to $4.80 billion. The company maintains the fund to cover preferred-stock dividends and interest payments. This allocation provides a dedicated cash source for meeting those obligations.
During the previous week, Strategy sold 1,690 BTC for $108.6 million. The company used the proceeds to repurchase STRC shares. No BTC-related transactions took place from Aug. 10 till Aug. 16.
Next BTC Purchase Remains Unscheduled
Phong Le, the company’s chief executive, says that Strategy is expected to return to its accumulation of Bitcoin once STRC gets close to its $100 stated value.
Upcoming SEC documents will reveal whether Strategy continues buying Bitcoin, selling MSTR stock, or continuing its investment into STRC.
The core idea in Saylor’s thesis is critical to the treasury strategy of the company. Nonetheless, Strategy still needs to meet its obligations in traditional currencies.
Also Read: Bitwise CIO: Massive Bullish Case for $1.3M Bitcoin Boom
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