Strategy (MSTR), the largest public holder of bitcoin will not panic unless BTC falls to the $8,000 to $10,000 range, its CEO has said.
Phong Le identified that range as the time when the company “would have to consider 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 the current bitcoin price of around $64,500 at the time of writing.
“Up until that point, we feel very confident about the balance,” Le said. “What we have to do is build a capital structure that can withstand bear markets and, of course, benefit from bull cycles.”
Strategy’s preferred stock, STRC, which is designed to give you the cash flow to fund your bitcoin purchase in exchange for a regular dividend (currently a 13% annual yield) has been under pressure in recent months. The stock is designed to maintain a face value of $100, which it lost in April and fell below $75 in late June.
When STRC drops below $100, it restricts Strategy’s ability to issue new shares and then use the cash to buy bitcoin.
