Strategy (MSTR), the largest public holder of bitcoin will not panic unless BTC falls into the $8,000-$10,000 range, its CEO said.
Phong Le identified this range as the point where the company “should take into account some of the risk associated with our debt,” in an interview with Bloomberg TV on Tuesday.
Such a drop would represent a drop of around 85% based on Bitcoin’s current price, which is around $64,500 at the time of writing.
“Until then, we feel very secure about the balance sheet,” Le said. “What we need to do is build a capital structure that can withstand down markets and of course benefit from up cycles.”
Strategy’s preferred stock, STRC, designed to provide it with the cash flow needed to fund its bitcoin purchases in exchange for a regular dividend – currently yielding 13% annually – has been under pressure in recent months. The stock is designed to maintain a par of $100, which it lost in April and which fell below $75 in late June.
When STRC falls below $100, it restricts Strategy’s ability to issue new shares and then use the cash to buy Bitcoin.
