Analysts at CryptoQuant have assessed Strategy's new capital management program, calling it an important but still incomplete step. In their view, the initiative does reduce liquidity risks, but the company has yet to resolve two fundamental issues: clear rules for buying and, equally importantly, for selling bitcoin.

As a reminder, at the end of June, Strategy presented a five-stage plan. Key points included forming a dollar reserve exclusively for payments on preferred shares and debts, increasing the STRC dividend to 12% per annum, and 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.

This plan was a response to "unsolicited advice" from CryptoQuant, which had previously recommended halting purchases of the first cryptocurrency and restoring fiat reserves. The company indeed followed the recommendations: from June 29 to July 5, Strategy sold approximately 3,588 BTC worth ~$216 million, and then raised $466.7 million through the sale of MSTR shares.

The result is impressive: the dollar reserve grew from $1.44 billion to $3 billion, and dividend coverage doubled — from 14 to 29 months. At the same time, the bitcoin reserve remained at 843,775 BTC. However, as experts note, the buyback of preferred and common shares has not yet been carried out.

Head of Research at CryptoQuant, Julio Moreno, emphasizes: "Strategy's program is a true course correction. But to complete this turnaround, they need to define two things: a systematic model for timing bitcoin purchases and a disciplined approach to selling in a rising market."

Two unresolved issues:

  • When to resume purchases? The share issuance rule at the 1x mNAV mark regulates capital raising, but not its deployment. Without a model that accounts for valuations, the company risks again "buying local tops."
  • How to sell in the next bull cycle? The current monetization program is defensive in nature. It does not provide for partial realization or hedging at cycle peaks. Such end-to-end sales discipline is the second half of active capital management.

My professional opinion: Strategy has taken an important step by acknowledging the need for risk management, but half-measures are not a strategy. Until the company implements protocols for both entering and exiting positions, it will remain a hostage to market volatility. The market has already priced this in: STRC has recovered from a low of around $75 to $85, but is still trading significantly below its par value of $100.