TLDR Strategy Inc’s $1.44B reserve will cover at least 21 months of dividend payments Bitcoin fell to under $85K, leading Strategy Inc stock to drop 7.9% The reserve was funded through the sale of class A common stock Strategy Inc holds 650,000 BTC, about 3.1% of the total supply Strategy Inc announced on December 1, [...] The post Strategy Builds $1.44B Reserve to Avoid Bitcoin Liquidation Risk appeared first on CoinCentral.TLDR Strategy Inc’s $1.44B reserve will cover at least 21 months of dividend payments Bitcoin fell to under $85K, leading Strategy Inc stock to drop 7.9% The reserve was funded through the sale of class A common stock Strategy Inc holds 650,000 BTC, about 3.1% of the total supply Strategy Inc announced on December 1, [...] The post Strategy Builds $1.44B Reserve to Avoid Bitcoin Liquidation Risk appeared first on CoinCentral.

Strategy Builds $1.44B Reserve to Avoid Bitcoin Liquidation Risk

2025/12/02 01:23
4 min read
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TLDR

  • Strategy Inc’s $1.44B reserve will cover at least 21 months of dividend payments
  • Bitcoin fell to under $85K, leading Strategy Inc stock to drop 7.9%

  • The reserve was funded through the sale of class A common stock

  • Strategy Inc holds 650,000 BTC, about 3.1% of the total supply


Strategy Inc announced on December 1, that it has established a US dollar reserve totaling $1.44 billion. The reserve was funded by selling shares of its class A common stock. The company stated the reserve will be used to support upcoming dividend and interest payments.

According to the company, the reserve covers 21 months of dividend payments and may eventually support up to 24 months. “Establishing a USD Reserve to complement our BTC Reserve marks the next step in our evolution,” said Michael Saylor, Executive Chairman of Strategy Inc. The firm plans to grow the reserve over time depending on market needs.

Despite this move, the company’s shares fell as much as 7.9% on Monday, marking the largest single-day drop in over a year. Investors expressed concern that the reserve might not be enough to prevent the company from selling Bitcoin if prices continue to fall.

Bitcoin Price Slide Raises Concerns About Future Sales

Bitcoin dropped by as much as 7% on Monday to below $85,000. The falling price raised fears that Strategy Inc could be forced to liquidate some of its holdings. The company currently owns 650,000 Bitcoin, which represents about 3.1% of the total supply.

The firm’s mNAV, a ratio comparing enterprise value to Bitcoin holdings, dropped to 1.14. If it falls below 1.0, the company may need to sell Bitcoin to cover payments. CEO Phong Le said on a podcast,

Strategy purchased 130 Bitcoin for about $11.7 million this week, funded again through share issuance. However, this consistent sale of equity to buy Bitcoin has created concern about shareholder dilution.

Earnings Guidance Adjusted Due to Market Volatility

The company also updated its full-year 2025 financial guidance. Previously, it had projected results based on a year-end Bitcoin price of $150,000. That assumption has now been revised to a range of $85,000 to $110,000 due to current market trends.

Based on that new range, Strategy expects its operating income to be between a loss of $7.0 billion and a profit of $9.5 billion. Net income could range from a $5.5 billion loss to a $6.3 billion gain. Diluted earnings per share are estimated between a $17 loss and a $19 gain.

These projections assume that the company continues raising capital and acquiring more Bitcoin. Strategy has adopted fair value accounting for its crypto assets, which causes income to fluctuate with the Bitcoin price.

Business Model Faces Pressure as Crypto Markets Cool

Strategy Inc’s shift from software development to Bitcoin accumulation has made it heavily reliant on cryptocurrency performance. With Bitcoin’s volatility, the firm’s business model is under increased scrutiny.

The company’s software business does not produce enough cash to fund dividends or interest payments. As Bitcoin generates no income, the company has relied on capital markets to fund its growth. This model, once popular, now faces doubts as markets become less receptive to high-risk strategies.

Index providers may soon drop Strategy from major indexes, according to JPMorgan analysts. This could lead to large outflows from passive funds, adding more pressure to the stock.

The firm said its Bitcoin KPI targets for 2025 now reflect expected yield between 22.0% and 26.0%, and a dollar gain of between $8.4 billion and $12.8 billion. These goals depend on further stock issuance and Bitcoin purchases throughout the year.

The post Strategy Builds $1.44B Reserve to Avoid Bitcoin Liquidation Risk appeared first on CoinCentral.

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