Strategy CEO Phong Le details the extreme technical scenario that would force the liquidation of crypto assets to protect shareholder value in the face of a lack of capital.
In the ecosystem of corporate finance linked to digital assets, few questions generate as much speculation as the fate of Strategy's Bitcoin reserves.
The company, which under the vision of its founder Michael Saylor has become the largest corporate holder of the cryptocurrency, has historically maintained a stance of unbreakable accumulationHowever, the firm's current CEO, Phong Le, has introduced a touch of financial pragmatism by revealing the only technical scenario that would force the company to consider selling its bitcoins: a critical drop in its stock market valuation relative to its net assets, combined with a drought of external capital.
Buy BTC, Strategy reaffirms its positionStrategy balances long-term vision with financial responsibility
For years, the market has operated under the assumption that Strategy's holding was absolute and indefinite. However, Le's recent statements clarify that, while the long-term holding strategy remains intact and is the core priority, fiduciary responsibility to shareholders imposes mathematical limits. This is not a loss of conviction in the underlying asset, but rather a corporate survival mechanism designed to protect per-share returns in extreme market conditions.
La revelation This comes at a time when the sophistication of investors demands greater transparency regarding liquidity risks. By defining these red lines, the company's management seeks to dispel fears of an irrational sell-off and, instead, present a protocol based on financial logic rather than market emotion.
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The mechanism explained by Phong Le focuses on the multiple of net asset value (mNAV)Currently, Strategy's business model operates through a virtuous cycle: the company issues shares that trade at a premium to the value of its Bitcoin holdings. This capital raised is used to acquire more cryptocurrency, which theoretically increases the intrinsic value of each outstanding share, a metric the company calls the intrinsic value of each share. "Bitcoin return per share".
However, Le explained in a recent interview that this model faces a theoretical obstacle. If the mNAV were to fall below 1—a situation in which the market values the company for less than the bitcoins it holds—and funding taps in the capital markets were simultaneously turned off, the equation changes drastically. In this hypothetical scenario, issuing new shares to meet financial obligations would be detrimental to current shareholders, as it would aggressively dilute their stakes.
Under those specific conditions, and only as a last resortThe sale of a portion of Bitcoin holdings would become mathematically justified, Le explained.
The executive emphasized that there are no current plans to sell any Bitcoin holdings and that such a decision would be a defensive measure to preserve shareholder value, preventing destructive dilution. Therefore, this clarification dispels fears that the company might panic-sell in the face of a Bitcoin price drop; on the contrary, any potential sale would be linked to the health of the company's capital structure and its ability to access liquidity, rather than to the volatility of the crypto market.
Financial obligations and the sustainability of the Strategy model
The context of Le's statements is significant. Strategy has built a complex capital structure that includes convertible debt and preferred stock, instruments that generate recurring payment obligations. According to estimates shared by Le, the company faces annual commitments ranging from $750 million to $800 million as certain recent issuances mature.
The main strategy to cover these payments remains issuing capital by taking advantage of the share premium, a method that the CEO describes as a way to "season the market," demonstrating quarterly solvency to maintain investor confidence.
To reinforce this position and allay market anxiety about the inherent volatility of digital assets, the company recently launched a "BTC Credit" dashboard. This transparency tool aims to demonstrate that the firm has sufficient coverage for its dividends and debts for decades, even in adverse scenarios where the price of Bitcoin remains flat or experiences severe corrections.
The management maintains that its debt obligations are covered even if the cryptocurrency price were to fall back to its average purchase price, around $74.000, and would even remain manageable in an extreme bearish scenario where the BTC price reaches $25.000. This data visualization tool aims to demonstrate that the company is not irresponsibly overleveraged and that the asset sale mentioned by Le is, in fact, a very remote possibility reserved for a systemic collapse of financing, and not an inevitable consequence of a market correction.
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Phong Le's distinction between desired strategy and technical necessity reflects Strategy's maturation as an institutional investment vehicle. While Michael Saylor continues to evangelize about Bitcoin's properties as a scarce, non-sovereign asset with global demand—citing its adoption from the United States to South Korea—the firm's operational management is responsible for ensuring that the financial rails support the long-term vision.
By publicly setting the conditions for a potential sale, the company paradoxically strengthens his "hodler" positionIt eliminates the uncertainty of a capricious sale and replaces it with a predictable roadmap.
Investors now know that as long as the stock trades at a premium and capitalization windows exist, the company's Bitcoin holdings are safe and that Strategy will remain the largest corporate treasury in the crypto ecosystem.
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