Analysts at CryptoQuant have assessed the recently announced capital management program of Strategy, calling it a significant step towards reducing liquidity risks. However, in their view, the strategy still lacks key elements necessary for full-fledged and sustainable management of bitcoin reserves.
Recall that at the end of June, Strategy presented a five-stage plan, which included creating a dollar reserve exclusively for paying dividends and interest on debt, increasing the dividend on STRC preferred shares to 12% per annum, as well as a buyback program for both preferred and common shares worth up to $1 billion each. Additionally, a bitcoin monetization program of up to $1.25 billion was announced to replenish the reserve and finance payments.
This plan was a direct response to CryptoQuant's recommendations, which had previously urged the company to halt bitcoin purchases and restore the dollar reserve. And indeed, the first steps were taken: from June 29 to July 5, Strategy sold approximately 3,588 BTC for ~$216 million, and then raised $466.7 million through the sale of MSTR shares. As a result, the dollar reserve grew from $1.44 billion to $3 billion, and dividend coverage doubled from 14 to 29 months. The bitcoin reserve remained at 843,775 BTC.
Two unresolved issues
Head of Research at CryptoQuant, Julio Moreno, emphasized that despite clear progress, two critical gaps remain in the strategy. First, there is no systematic timing model for resuming bitcoin purchases. The share issuance rule at the 1x mNAV mark regulates capital raising but not its deployment. Without a clear model that accounts for market valuations, the company risks once again "buying local tops."
Second, the bitcoin monetization program is purely defensive in nature and does not provide for partial realization or hedging at the peaks of the next bull cycle. According to Moreno, a disciplined approach to selling in a rising market is the second half of active capital management, without which the strategy reversal remains incomplete.
It is worth noting that STRC shares have recovered from a low of around $75 to ~$85 after the program announcement, but are still trading below the par value of $100. This indicates that the market is not yet fully confident in the effectiveness of the new measures.
My comment: Strategy's strategy is undoubtedly a step in the right direction, but it demonstrates a fundamental problem for many corporate treasuries working with bitcoin: the lack of clear discipline both on entry and exit. Without a systematic approach to asset management in conditions of high volatility, the company risks not only missing out on profits but also undermining investor confidence. The market needs not just loud statements, but transparent and reproducible action algorithms.