Strategy CEO: No Bitcoin Sale Before 2029 Backed by $1.44B Reserve

TLDR

• Strategy sets up a $1.44 billion cash reserve to cover dividend payments
• CEO Phong Lee says Bitcoin sales are unlikely before the year 2029
• The reserve is intended to separate short-term needs from long-term Bitcoin holdings
• The company aims for over two years of dividend coverage in US dollars
• Bitcoin will only be sold if a three-year downturn keeps mNAV below 1x

Strategy has created a $1.44 billion cash reserve to protect dividends and avoid selling Bitcoin before 2029. CEO Phong Lee confirmed that the reserve aims to separate short-term payouts from long-term Bitcoin holdings.

$1.44 Billion Buffer to Protect Dividend Flow

Lee stated the reserve covers about 21 months of dividend payments under current conditions. He said, “We built this buffer to avoid selling Bitcoin during downturns and to maintain dividend stability.” The company targets a longer U.S. dollar coverage period of more than two years.

He emphasized the reserve will shield core Bitcoin assets during weak market phases. Lee added that the company remains focused on protecting long-term holdings against volatility. Therefore, the reserve aims to manage short-term obligations without sacrificing strategy.

He noted that cash payouts will continue even if the crypto market remains weak. “Bitcoin is not for short-term needs,” Lee explained, “It supports long-term growth and strategy.” This approach helps insulate Bitcoin holdings from market pressure, he said.

mNAV Ratio Drives Decision on Equity and BTC Sales

The firm monitors market net asset value, or mNAV, to assess equity issuance decisions. Lee explained that issuing shares becomes unfavorable when mNAV falls below 1x. “We won’t raise equity below 1x mNAV to pay dividends,” he said.

This metric links the company’s stock value to its Bitcoin assets. A low mNAV discourages funding dividends through equity, according to Lee. He said this makes the cash reserve a critical tool for stability.

Lee warned that a prolonged downturn could still change plans. He outlined a scenario where Bitcoin remains low and mNAV stays below 1x for three years. In that case, the firm may be forced to sell Bitcoin.

Strategy Prefers Preferred Shares and Steady Bitcoin Accumulation

Strategy plans to fund operations using preferred shares rather than traditional equity. Lee described them as “more credit-like” and said they offer flexibility over debt or convertibles. He confirmed the firm issued perpetual preferred shares under this structure.

Lee explained the market may need time to understand the structure. He said adoption of this funding model could take up to three years. He compared it to early phases of the firm’s Bitcoin strategy.

Strategy will continue purchasing Bitcoin only when excess capital is available. “We’re not traders,” Lee said, “We invest in Bitcoin when funds allow.” The company does not attempt to time the market.

He confirmed the new reserve directly addresses investor concerns on dividend continuity. The cash buffer provides a timeline to maintain payouts without selling Bitcoin. He said this protection remains in place until at least the end of 2025.

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