Analysts are divided on <Strategy>'s Bitcoin sell-off, with most believing it does not affect the long-term HODL strategy.
BlockBeats News, June 1st – After disclosing the first sale of Bitcoin in four years, Strategy, Wall Street analysts had mixed views on the signal sent by this move. However, most opinions believe that the transaction was of a very small scale and insufficient to alter the company's long-term Bitcoin accumulation strategy.
According to the announcement, Strategy sold 32 Bitcoins at an average price of about $77,135 from May 26th to 31st, cashing out approximately $2.5 million to pay dividends on its high-yield perpetual preferred stock, STRC (Stretch). As of the end of May, Strategy still holds over 843,700 Bitcoins, with this sale accounting for only about 0.004% of the total holdings.
TD Cowen analyst Lance Vitanza stated that the market's interpretation of this transaction as Strategy significantly reducing its Bitcoin holdings is misleading. He believes that this transaction has minimal economic impact and will not change the core logic of the company's Bitcoin accumulation; thus, he maintains the $400 target price for MSTR stock.
Benchmark analyst Mark Palmer also believes that Strategy will not rely on selling Bitcoin as the primary source of funds to pay preferred stock dividends in the future. Instead, it is more likely to continue supplementing its cash reserves through issuing stocks. However, he pointed out that this sale demonstrates that the company's Bitcoin reserves can serve as a "safety net" for dividend payments when necessary.
On the other hand, Mark Connors, Chief Investment Officer of Risk Dimensions, believes that this move reflects Strategy's shift towards prioritizing the health of its capital structure rather than adhering to an absolute "never sell Bitcoin" stance. He stated that this shows Michael Saylor's willingness to sell some Bitcoin when necessary to protect the interests of shareholders and creditors.
After the news was announced, Strategy's stock price fell by about 5% on Monday, while the price of Bitcoin dropped to around $71,000, hitting a two-month low. The market's current focus has shifted from the 32 Bitcoins themselves to whether this was just a routine financial operation or an early sign of Strategy's future flexibility in managing its Bitcoin reserves.
