Strategy Sells $216 Million Worth of Bitcoin Amid Declining Prices

Strategy, the company that accumulated Bitcoin for several years and became one of its largest holders, recently sold 3,588 BTC for approximately $216 million to fund dividends on its preferred stock. This move is a watershed moment for investors to evaluate just how durable Strategy's business model actually is.

The value of Strategy's Bitcoin holdings would increase when Bitcoin's price rises, allowing the company to practically print cash by issuing stock or borrowing money, funding its dividends and BTC purchases to grow its reserves. However, since peaking last fall, Bitcoin prices have continued to slide, and Strategy's common stock now trades roughly in line with the value of the company's BTC reserves and continues to decline as BTC prices drop.

Nikolaos Panigirtzoglou, the lead crypto analyst at JPMorgan, says that the bigger threat to the cryptocurrency market comes from adoption that does not benefit public blockchains and their tokens. He notes that permissioned blockchains are preferred because they offer greater privacy, anti-money laundering controls, and governance.