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However, Bitwise Chief Investment Officer Matt Hougan has brushed off such concerns, calling the speculation that index changes and market pressure could force the Saylor-led firm to unwind its multi-billion-dollar position “just flat wrong.”
Why Strategy Will Not Sell From Its Massive Bitcoin Stockpile
In a Dec. 3 research note to clients titled “No, Virginia, Strategy Is Not Going To Sell Its Bitcoin,” Hougan felt compelled to address two of his most-frequently asked questions: whether Strategy will be booted from MSCI indexes, and whether such a decision could end up forcing the company to sell BTC for the first time.
Nasdaq-listed Strategy — formerly known as MicroStrategy — started acquiring Bitcoin in 2020 as a way to protect shareholder returns, a model now being copied by scores of other companies. It has since spent a whopping $48.3 billion on the maiden cryptocurrency, largely using leverage, and now holds roughly 650,000 Bitcoin. This is equivalent to 3.1% of the 21 million supply and is by far the largest stack owned by a public company.
The company has been under fire over the last few weeks after the price of the premier crypto plunged from an all-time high of over $120,000 to as low as $82,000.
 
While BTC has since recovered above $92,000, still around 26.4% below the record, critics argue that Strategy is at risk of removal from key equity indices. Hougan estimates a 75% probability that Strategy will be removed.
The bigger concern among investors, Houdan highlighted, is that losing major index status could trigger a chain of reactions: stock falls, the share price drops well below net asset value, forcing Strategy to liquidate its Bitcoin in a bid to stabilize its financial position.
But according to the Bitwise exec, even if the stock trades below NAV, “there is nothing about MSTR’s price dropping below NAV that will force it to sell.”
Strategy Builds Fortification To Deal With Market Pressures
Earlier this week, Strategy announced the formation of $1.44 billion U.S. dollar reserve.
The reserve was funded by at-the-market sales of its MSTR common stock, and the Bitcoin treasury initially intends to keep enough money in the reserve, giving the company flexibility to meet short-term obligations such as dividends and interest payments for at least 12 months during market turbulence.
However, during the firm’s latest investor call, Strategy co-founder Michael Saylor didn’t rule out selling the cryptocurrency.
“Not only can the company sell Bitcoin in order to pay the dividends, the company can actually sell highly appreciated Bitcoin, pay the dividends, and then continuously increase its Bitcoin holdings in every quarter, forever,” he posited.