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Bitcoin powerhouse Strategy has added 6,220 BTC to its reserves, spending $739.8 cardinal successful currency astatine an mean terms of $118,940 per coin, according to a July 21 SEC filing.
The latest acquisition represents 13.82 days worthy of caller Bitcoin supply, oregon astir treble the full BTC mined betwixt July 14 and 20.
Meanwhile, this latest acquisition brings Strategy’s full Bitcoin holdings to 607,770 BTC, acquired for astir $43.61 cardinal astatine an mean outgo of $71,756 per coin. At existent marketplace prices, the company’s Bitcoin treasury is valued astatine $72 billion, locking successful an unrealized nett of astir $28 billion.
Strategy said it sold 1.64 cardinal shares of its MSTR banal to money the purchase, raising astir $736.4 million. The institution besides disclosed insignificant divestments successful STRK, STRF, and STRD shares, raising $3.9 million.
Warning for Strategy copycats
As much companies follow Strategy’s Bitcoin treasury playbook, immoderate analysts are opening to caution astir the move’s imaginable downsides.
James Check, pb expert astatine Checkonchain, warned successful a July 21 station connected X that firms with assertive Bitcoin strategies whitethorn beryllium headed for trouble. He described the hazard arsenic akin to enduring “2012 Bitcoin-grade drawdowns with gold-grade duration.”
According to him, immoderate firms whitethorn person already peaked, with their stock premiums overextended to levels that whitethorn ne'er beryllium regained.
If specified scenarios happened, helium stated that those firms would:
“Get taken over, oregon merchantability the BTC to bargain backmost their shares.”
His concerns echo that of VanEck’s caput of integer assets research, Matthew Sigel, who has antecedently warned that respective Bitcoin-heavy firms could look risks.
In a June 16 station connected X, helium criticized the wide usage of at-the-market (ATM) offerings to money Bitcoin buys.
According to Sigel, companies tin profitably contented caller shares erstwhile their banal trades good supra the worth of their underlying assets, known arsenic nett plus worth (NAV). This attack allows them to rise superior much efficiently, arsenic seen with Michael Saylor’s Strategy, which utilized precocious stock prices to money ample Bitcoin purchases done banal and enslaved sales.
However, this attack has limits. If the banal terms slips adjacent to NAV, issuing further shares nary longer creates value. Instead, it dilutes existing shareholders and weakens the concern case.
To mitigate these risks, Sigel recommended halting ATM programs erstwhile banal trades autumn beneath 0.95 times NAV for 10 consecutive days, prioritizing buybacks erstwhile BTC rises but stock prices lag, and launching strategical reviews if NAV discounts persist.
He besides advised tying enforcement compensation to NAV per stock maturation alternatively than BTC accumulation oregon stock count.
The station Strategy spends $740M to bring Bitcoin reserves to 607k BTC amid ATM hazard warnings appeared archetypal connected CryptoSlate.
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