Saylor Signals Possible Bitcoin Sell-Off to Calm Markets Amid Recent Q1 Earnings Call

• The loss was primarily caused by unrealized losses on Strategy’s Bitcoin (BTC) holdings, which experienced a 23.8% decline in value during the first quarter.
• Strategy has been a steady buyer of Bitcoin since it started using the cryptocurrency as a principal treasury asset in August 2020.

In a departure from its long-standing “never sell” Bitcoin policy, Michael Saylor, chairman of Strategy, said that the firm may sell Bitcoin in order to “inoculate” the market against unexpected panic or to strengthen trust in the business.

When asked about the strategy’s plans for the first quarter, Saylor said, “We’ll probably sell some Bitcoin to fund a dividend, just to inoculate the market, just to send the message that we did it” during Tuesday’s earnings call.

Reassuring Investors

Saylor stated that market participants will understand that “the company’s fine, the Bitcoin’s fine, the industry’s fine, the world didn’t come to an end” following Strategy’s announcement of a $12.5 billion net loss. The loss was primarily caused by unrealized losses on Strategy’s Bitcoin (BTC) holdings, which experienced a 23.8% decline in value during the first quarter.

Strategy has been a steady buyer of Bitcoin since it started using the cryptocurrency as a principal treasury asset in August 2020. “I expect we’ll buy Bitcoin every quarter forever,” Saylor said on CNBC’s “Squawk Box” show in February, addressing fears that the corporation could have to sell its cryptocurrency holdings if the market took a nosedive.

Additionally, Saylor said that Strategy would be able to meet its debt commitments without selling even if the price of Bitcoin dropped to $8,000—an extraordinary fall. To finance its Bitcoin acquisitions in the last several months, Strategy has relied on perpetual preferred stock offerings (STRC) that generate dividends.

Strategy has purchased 145,834 Bitcoin this year, increasing its total holdings to 818,334 Bitcoin, valued at $66.7 billion. A significant percentage of these purchases was funded by Stretch.

Saylor said that Strategy’s goal is to make Stretch the largest credit instrument on the planet. He went on to say that the approach expects liquidity to rise in tandem with its assets under management, which would allow for wider adoption and the creation of a “network effect.”

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