Strategy Just Sold 32 Bitcoin to Pay Dividends — Here's Why the Real Risk Is Much Bigger Than It Sounds
71d ago · 1 source
Strategy (formerly MicroStrategy) sold 32 BTC to cover dividend payments on its preferred stock. While the amount is small relative to its massive Bitcoin holdings, the move raises questions about what could happen if the company is forced to sell significantly more Bitcoin in a downturn to meet its financial obligations.
WHY IT MATTERS
Imagine you bought a house because you believed its value would keep going up, and you took out multiple loans to buy it. Now imagine you have to make monthly payments on those loans no matter what. If the house's value drops and you run out of cash, you might be forced to sell the house at a bad price just to keep up with payments. That's essentially the risk Strategy faces. They've borrowed heavily to buy Bitcoin, and now they have bills to pay — like dividends to shareholders. Selling 32 Bitcoin is tiny, but it shows that even the biggest Bitcoin believer can be forced to sell. If Bitcoin's price ever crashes hard, they might have to sell a lot more, which could push the price down even further.
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